How to Lend Money to Family Members
Helping your kids or loved ones buy their first home? Many families want to support the next generation—and a well-structured intrafamily loan can be a smart, rewarding way to do just that.
Whether it’s for a down payment or another big milestone, lending money within the family can work well if you do it right:
- Put everything in writing with a promissory note
- Include repayment terms and interest (check the IRS Applicable Federal Rates)
- Consider having the agreement notarized
If it’s a gift instead of a loan, be mindful of the annual gift tax limits ($19,000 per person in 2025 or $38,000 for couples)
Of course, there are pros and cons—relationships matter, and repayment isn’t guaranteed. But with the right structure, you can give a meaningful hand up and protect yourself in the process.
Always consult your tax advisor, but use this as a helpful starting point for your family financial planning.
