Ways family can help
Your family can invest, instead of giving the money away.
When family helps you buy a home, the money almost always arrives as a gift. It works, and it's gone: to help, your family has to give the money up for good. There's another way to do it, where they invest instead, you still own your home, and their money stays theirs.
How it works
A family investment
Your family opens a housing account at Tufa and invests through it. When you buy, the fund provides a second lien alongside your first mortgage, on eligible loan programs. Their money never passes through you: it goes from their account into the fund, and the fund into the closing. You qualify for your mortgage on your own, and you own the home outright.
How it flows
Your family invests
Through a housing account at Tufa
You buy the home
The fund's second comes in at closing
You own it outright
No monthly payment on the second
The second is repaid
When you sell or refinance
What it can do for you
The fund's second covers part of the purchase alongside your first mortgage. That can put a higher price in reach without borrowing more on the first, and without stretching the payment you can comfortably afford.
There's no trick in it. The second doesn't unlock a bigger first mortgage, and it doesn't change how you qualify. It also doesn't count against your debt-to-income ratio, because there's no monthly payment to count. Your first mortgage is underwritten exactly the way it would be otherwise.
What you owe, and when
Nothing monthly. The second has no payment and no interest, so nothing accrues while you live there. It's repaid when you sell, when you refinance, or whenever you decide to pay it off. Until then, nothing about it touches your month.
What's owed is a fixed share of what your home is worth at that point, agreed up front, rather than a balance that grows. Because it's tied to value, it moves with the home in both directions: if your home is worth less then, the repayment is less too. It can't follow you beyond the home itself.
What your family gets
Shares in the fund, held in their own name, in their account at Tufa. Not a piece of your home, and not a claim on you. When the second is repaid, the fund is repaid, and their return reaches them through the shares they hold. You never pay them, and they never take a cut of your sale.
Their account is theirs to ask about. Anything to do with the investment itself lives with Tufa at tufafunds.com.
What this is, what it isn't
Your first mortgage is a standard mortgage, with you as the borrower, underwritten the normal way. FamilyBacked is your mortgage company: Family Backed Mortgage, Inc. is the licensed mortgage subsidiary of Tufa, Inc., and we're paid when a loan funds. Our license type isn't the same in every state, so what we can do depends on where you're buying. The second lien is available on eligible loan programs, not on every loan.
FamilyBacked does not offer investments. Housing accounts and fund details are at tufafunds.com. Nothing here is an offer to sell or a solicitation of any security.
Questions families ask
The four questions that come up first.
Do my parents own part of my home?
No. You own your home outright, and your parents are never on the title. What they hold is shares in a fund, in their own name, through their account at Tufa. The fund holds a second lien on the home, so your parents own an investment, not a piece of your house. You live there, and you decide if and when to sell or refinance.
Do I make payments on the second?
No. The second lien has no monthly payment and no interest. Nothing is due until you sell, refinance, or decide to pay it off. At that point it is repaid as a fixed share of your home's value. Because it is tied to value rather than a balance that grows, if your home is worth less then, the repayment is less too.
What is Tufa?
Tufa is the investment platform where your family's housing account and the fund live. FamilyBacked is your mortgage company: we handle your loan. Family Backed Mortgage, Inc. is the licensed mortgage subsidiary of Tufa, Inc. Your family opens their account with Tufa directly, and the account details, including anything about how the investment works, are at tufafunds.com.
What happens when I sell?
You sell like any homeowner. The second lien is repaid out of the proceeds as the fixed share of your home's value you agreed to at closing, the same way your first mortgage is paid off. What's left is yours. Your family isn't paid by you and doesn't take a cut of your sale. Their return reaches them through the fund, at Tufa.
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