Randall Posted March 6, 2012 Report Share Posted March 6, 2012 If a person receives a grant (Ameridream program) to help purchase a home, is this part of the person's purchase price for basis purposes or does the grant have to be subtracted? I know logically it wouldn't make sense to include this, but there are some quirky benefits. Settlement statement shows total purchase cost, then the grant as part of the upfront payment. Quote Link to comment Share on other sites More sharing options...
jainen Posted March 7, 2012 Report Share Posted March 7, 2012 >>does the grant have to be subtracted?<< Is Ameridream back? It's been illegal for years because it was a fraudulent way to get around FHA lending requirements. The so-called "grant" was actually funded by the seller who paid a so-called "fee" to the organization. That means the buyer got 100% financing with no down payment or equity, forcing the government to guarantee a high-risk loan. I think you use substance-over-form and reduce the purchase price to what the seller really netted. Quote Link to comment Share on other sites More sharing options...
Randall Posted March 7, 2012 Author Report Share Posted March 7, 2012 This was in 2008. I don't know much about Ameridream myself. I just saw this on the settlement statement. I agree that with the substance over form approach. This amount wasn't paid by the client so it just essentially reduced the cost of the home. Quote Link to comment Share on other sites More sharing options...
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