buying a family home

[jec411]

What is the name of your state?What is the name of your state?Louisiana

Background info:

My grandmother owns 2 homes. I rent one of them and the other is unoccupied. I wish to purchase both from her. She has offered to sell them both to me at well below market value.

Unoccupied home is worth 90k. The home that I'm renting from her is worth 90k.

Short of taking advantage of her kindness and after speaking with a few mortgage pro's, I've determined this:

I'd buy the home I'm currently living in from her at 75k. Proceeds from that sale would satisfy both outstanding mortgages on the homes for her. She then signs the deed to the unoccupied home over to me.

I have no plans to sell either of these homes for many many years.

Questions:
How would a gift tax apply to either her or I given the relationship, the below market value selling price, and her giving the second home to me without sale?
Any other tax implications for either of us for this transaction?

The reply that I recieved from a tax guru was this:

The difference between the fair market value and the price you pay will be considered a gift from Grandma. She will have to file a gift return, although no tax will be due, it will reduce the amount of tax-free estate she will have upon her death.

If the total FMV is $180,000, and you pay $75,000, the gift amount is $105,000. Further, your "basis" in the one house will be $75,000, and in the other will be whatever her basis was, since the second house is an outright gift. This could have pretty serious tax consequences for you if and when you sell the houses, so proceed carefully.

At a minimum, I would see that you pay $75,000 for the one you intend to use as a rental, and take the freebie on your personal residence. That will give you more depreciable basis in the rental property.

So now my new question is this........can I do that with a loan officer or mortgage broker? Will a lender let me borrow via traditional first time home buyer financing possibly using VA to purchase a home for which I do not intend to use as my primary residence?