How to purchase home from parents under value?My parents bought a home at auction and allowed me and my husband to put the sweat work in to flipping it while they footed the bill. They have $91,000 in the house including renovations and would like us to pay $100,000 so they profit $9,000. We imagine the house will appraise for approximately $140-$150k. My lender mentioned doing a gifted equity loan. From what I have read so far, it seems there may be some tax reprocussions and capital gain issues for my parents. They do not want to show much capital gain on the house. I'm thinking it may just be best for us to go with original plan and get a USDA loan for the $100k. Thoughts? What happens when buying under value?February 02 2012 - Albemarle00YesReport a ProblemProblemSelect oneOffensive contentIrrelevant contentSpam (pure self-promotion)OtherDetailsYour emailPlease enter a valid email address.Submit CancelContent flaggedWe will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.We're sorry. This service is temporarily unavailable. Please come back later and try again.