A couple of ideas for you, uranus121
If you both own the property at transfer it appears that the closing agent must report all sellers and withhold appropriately. See https://www.irs.gov/pub/irs-pdf/i1099s.pdf p. 3 (multiple transferors).
If the sale price (not gain) is < $250k no 1099-S is required if all sellers certify that the property was their principle residence such that they qualify for the sect 121 exclusion.
Transferring the house without consideration would probably be a gift and require the filing of a gift tax return. It wouldn't result in gift tax unless your father's lifetime gifts were > ~$5.5M. It would also eat into his $5.5M estate exclusion. (As a US resident he is subject to US Gift and Estate tax, with complications if he is a citizen of various countries with whom we have gift/estate tax treaties.)
Transferring for a loan might work, but you would want that to be real and documented, possibly with interest and payments.
In either case transferring the house will incur costs possibility including attorney fees, transfer taxes, etc.
Finally, your father should be able to get the withholding back by filing a US tax return and showing the house gain as excluded under sect 121. Unfortunate that it would need to wait until the filing of that return, but at least he'll get it back. You should verify this with a tax professional (CPA, Enrolled Agent, tax attorney) to be certain there isn't some exception here that I am not aware of.
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