@Rhkjr
(a) For US Tax purposes, any actual earned interest ( and received ) is taxable income to the lender ---the terms i.e. the repayment schedule, the interest rate etc. are all negotiable and part of the agreement. Just to note , however, the lender has to charge fair interest ( generally in line with the local market conditions ) and especially when not at arms-length / between relatives the charged interest rate should meet fed rates published by the IRS ( else could be interpreted as gift). I am assuming here that this is a formal agreement and under the eyes/ advice of a legal/ financial professional.
(b) What do you mean by "secured" -- by the "house " being sold or what ? Just curious , has no tax implications.
(c) what are you trying to achieve ? I am always leery of formal agreements between family members because of risk of "losing" even when "winning". I would much rather be a surety of a commercial secured loan between the relative and a bank/lender. IMHO
