<prompt> Human: Hi all, first post ever so here we go. My wife and I are planning to purchase my fathers home in a few months. His idea was for us to avoid having PMI on our mortgage by essentially gifting us the 20 down payment. He would do this by selling us his house valued at 230,000 approx., for 175,000. Im not sure what kind of implications this could have on our financing. The loan advisor said that he would just have to sign a purchase agreement at that price. He believes we should just tell them that I paid him the down payment already but I dont think that would work. Any advice would be much appreciated.  <response>: Whatever you do, dont lie about anything on any loan applications, closing statements, HUD-1s, etc. There are a lot of people sitting in prison right now for lying about such things during the housing bubble. 