Whenever we talk with friends about grown kids and money, one connection is a constant. Almost all of us have helped or plan to help our children buy a house. We're the generation that was lucky enough to buy our homes before the infamous bubble and whose overall estates have benefited from the pre-2008 relentless climb in home values. The climb has been such that many of our children, successful though they may be at this point in their early careers, can't afford to buy a house. And we want them to have one: Not just as a shelter, but as a solid financial investment. (Yes, we still believe those days will come again.)
When we do extend that helping housing hand, it tends to fall into one of three forms: an arms-length deal in which money for a downpayment is loaned and repayment is expected; a loan that's not-so-arms length and will be repaid when the house is sold; a loan that's really a gift that comes with no strings attached. (There is a fourth form--or so I've heard: Some buy the house outright for their kids. They put up the downpayment and pay the mortgage fees. But that seems a whole 'nother category of house "loan.")
Here's the story in stats, from a 2010 survey by the National Association of Realtors (Profile of Home Buyers and Sellers): 27 percent of first-time buyers who made a down payment received a gift from a friend or relative, typically their parents; 9 percent received a loan from a relative or friend.
For those 27 percent who give housing help as a gift, the survey includes some non-economic factors to consider: either don't attach any strings or declare upfront what those strings are. They can be anything from eventual repayment of the "gift" (which makes it more of a loan) to calling home more often. Not sure how well that latter point works.
