Friends and Family Mortgage

Updated 8 months ago ​by Aneesah Emeka

In a nutshell:
It's a loan from friends or family. But, it's no different legally from a conventional mortgage. You sign a loan contract and pay it back with interest in monthly payments, and your lender holds a lien on your property. If you default, even your own mother can foreclose. 


  • With a Friends and Family Mortgage, re-payment is more flexible, especially when emergencies pop up. 
  • Due to your close relationship with the lender, there's normally lower interest rates. 
  • Lenders get a higher return on investment than letting cash just sit there. 


  • Normally, you can't combine one with a conventional loan -- mainly because banks feel that a Friends and Family loan leads to over-borrowing.

Considering a family down payment loan?

Landed can guide you through a family and friends down payment loan and structure it so family members and friends are protected from IRS scrutiny and other complications that could arise down the road.