I would strongly recommend talking to a tax attorney before making this move. Our tax attorney has stated that if you try to do this and you are not a registered mortgage lender (i.e. - this is not your business and this is a one time deal for family member) you cannot secure the loan with the property and you cannot consider this a mortgage for the purposes of writing off the interest as mortgage interest (for the buyer), although you DO have to pay tax on the interest payments you receive if you are the lender. Clearly, if the IRS never comes knocking on your door, maybe you get away with it , but my attorney tells me the fine if you are guilty of this is $1MM. Be careful and get it in writing if you get advice otherwise.
here's a link to an explanation (you must copy and paste the link for some reason; if you simply click on it, you are taken to a "Page Not Found" address. I don't get it but jsut copy and paste in new browser tab):
https://cherrycreektitle.com/dodd-frank-stands-in-the-way-of-parents-seeking-to-provide-purchase-mon...
