Multigenerational Living: How To Thrive in a Home With Your Extended Family Mandy Ellis Home.com Contributor 11/22/2021 - 23 min. read The past 10 years have seen a growing return to multigenerational living — having multiple generations of your family living in the same home. The trend accelerated during the pandemic, as families established “bubbles” and relied on one another for logistical and emotional support. Whether you’re looking for a multifamily home to care for aging parents, provide more space to share with your adult children, or combine households with extended family members, there are many benefits of multigenerational living. Need a new home for your family? Check your mortgage eligibility here. WHAT'S IN THIS ARTICLE? multigenerational living? Jump ↓ Is multigenerational living right for your family? Jump ↓ How to thrive in a multigenerational home Jump ↓ How to find the right home for multigenerational living Jump ↓ Loan options for multigenerational housing Jump ↓ Frequently asked questions Jump ↓ What is multigenerational living? The term “multigenerational living” refers to several generations of a family living in or on the same property and sharing responsibilities such as bills, cooking, taking care of children, and other family duties. As of 2016, Pew Research Center found that 64 million Americans lived with multiple generations. The most common type of multifamily home was parents living with their adult children over the age of 25. Households with three or more generations (grandparents, adult children over 25, and grandchildren) were the second most common. The coronavirus pandemic accelerated that trend, as multiple generations of families decided to hunker down together. Add to that boomerang children returning from college to live in their parents’ homes, and it’s not surprising that the National Association of REALTORS (NAR) reported a 15% increase in the number of homes purchased for multigenerational living between April and June 2020. That is the highest percentage of multifamily home purchases since NAR started tracking the trend in 2012. “Starting around 2010, we saw the trend going up, and builders created diversified plans…[family members] would have private spaces where they could not feel like a burden or right under the fingers of the rest of the household,” said Susan Horton, President of the Austin Board of REALTORS and Broker Associate at John Horton Realty. “With increasing costs for elderly living facilities, combining households is becoming more common,” said Joe Pessolano, a branch sales manager with Fairway Independent Mortgage Corporation in Garner, N.C. (Fairway owns Home.com). He said it’s particularly common to see older parents moving in with their adult children. Is multigenerational living right for your family? Living in a multigenerational home offers many benefits. But it’s not a decision to make lightly. Although you’ll be living with family, the shift will be an adjustment for everyone, especially if you all have your own routines, hobbies, and lifestyle preferences. Below is a deep dive into some considerations to make when it comes to finances, household responsibilities, lifestyle, and privacy. We’ll also cover how to look for homes that will be the right fit for the whole family. But first, let’s look at some of the benefits and drawbacks of living in a multigenerational home. Benefits of multigenerational living CHANCE TO BUILD DEEPER RELATIONSHIPS Living with family members gives you a chance to get to know one another better and forge new bonds through shared experiences. If you live far from family, or don’t see one another often because of hectic schedules, you may find yourself feeling distant from loved ones or wishing you had more time together. When you live together, you can develop shared hobbies and interests and swap stories about your day over family meals. Time spent doing seemingly small tasks provides a chance to get closer to one another. SHARED RESPONSIBILITY FOR HOUSEHOLD TASKS Trying to do it all can be overwhelming, especially if you have children or work a demanding job that requires long hours. Keeping the house tidy and organized, running errands, preparing meals, keeping up with lawn care and maintenance — it can be a lot for one or two people or for a small family. When you move in with relatives, or vice versa, you can share those tasks. You can take turns cooking, cleaning, picking up groceries, running the kids to school or extracurricular activities. Ideally, by sharing the household workload, everyone will have fewer items on their to-do lists and can spend more quality time together, more time resting, and more time doing things they really enjoy. Related reading: How to Buy a Home as a Single Parent: Advice From People Who Have Been There POTENTIALLY LOWERING THE COST OF LIVING Sharing the cost of living expenses, including utility bills, groceries, and household necessities, can ease the strain on everyone’s wallet, according to Pessolano. Compared to single-family homes, multigenerational households may be able to pool resources to cover the family’s necessities. Additionally, combining households may help them save in other ways. For instance, retired grandparents may be willing to take on some childcare duties, reducing the family’s daycare or babysitting expenses. They might also be able to help out with grocery shopping and cooking, allowing working parents to cut back on dining out or grocery delivery services now that they need to rely less on these options. “With increasing costs for elderly living facilities, combining households is becoming more common.” Joe Pessolano, Fairway Branch Sales Manager POTENTIAL TO PURCHASE A LARGER HOME Reduced living expenses can translate to increased savings that can be used toward a down payment on a home. If multiple occupants in the home are working — perhaps an older parent still works despite being at retirement age — they may be able to afford a larger property when buying together. “Mortgage companies will allow income to be used for qualifying of the occupants,” Pessolano said. “This typically results in the ability for the buyers to qualify at a higher price point and larger home.” KEEP FAMILY TRADITIONS Having an older parent or relative move in can strengthen your ties to your family roots. Your shared history can create a strong bond, and they may have traditions they’d like to teach you and pass down to other generations. Recipes, rituals, holiday traditions, spiritual beliefs — multigenerational living gives you an opportunity to practice and discuss these together, ultimately giving them greater meaning. SHARED CAREGIVING Having older family members move in can help with childcare and raising the kids, as they may be able to help out with homework, storytime, cooking, and school activities. But the reverse can happen, too. Adult children, and even teenage grandchildren, can help senior family members as they age by taking them to doctor’s appointments, driving them to social events, and helping with their day-to-day needs as they age. Drawbacks of multigenerational living LACK OF PRIVACY OR INDEPENDENCE If you’re accustomed to having your own space, multigenerational living can be an adjustment, especially if your home is on the small side. Ana De La Cruz, Licensed Marriage and Family Therapist (LMFT) said that if you plan on living in a multigenerational home, you need to set boundaries to create healthy relationships. “Everyone needs to feel like individuals,” De La Cruz said. “In terms of purchasing the home itself, make sure they’ll have their own space, and in terms of interacting with each other, they’ll have to create rules on how that will look and what’s expected.” That means setting expectations and boundaries around finances, having dinner together, cooking and cleaning, grocery shopping, TV schedules, alone time, and personal space. “Everyone needs to feel like individuals.” Ana De La Cruz, Marriage and Family Therapist VIOLATED BOUNDARIES Multigenerational living arrangements require clear boundaries, both physical and emotional. It helps if everyone has their own room or space in the home to make their own, where they can practice hobbies, rest, and have downtime. When you’re living in close proximity, it can be difficult to keep certain details of your life private. Perhaps you and your spouse need to discuss your finances or a work situation, and you’d prefer not to share that information with a parent, child, or other relative living in the home, despite them asking about it. Without clear boundaries about what you’re willing to discuss and what’s appropriate in the dynamic, resentment can fester and the relationship dynamic can become difficult. CONFUSION ABOUT HOUSEHOLD ROLES AND RESPONSIBILITIES When you first combine households with extended family members, you may need to discuss who will be responsible for what. For instance, perhaps you enjoy cooking and it’s important for you to be involved in it, but another family member has assumed responsibility off all the cooking in the household. This may create tension. The sooner you discuss and define the household roles, the better your chance of avoiding hurt feelings and conflict. You may need to compromise or be willing to try new ways of doing things as you transition to multigenerational living. MISUNDERSTANDINGS BECAUSE OF A GENERATION GAP Some misunderstandings among older people and younger relatives are inevitable. They may have certain expectations about your household’s routines, rituals, and beliefs, and there may be a clash if those issues aren’t addressed. Patiently discussing these problems when they arise, or addressing them before moving in together, may help you ward off serious conflicts. FAILURE TO DELEGATE If you’ve invited other family members to live with you, it may be difficult to see them as cohabitants rather than guests. Perhaps you still want everything done “your way,” or you feel like you need to manage the home for everyone. But that is a path to burnout and resentment. If someone is living in your home full-time and they are willing and able to participate in chores, cooking, maintenance, and other activities, identify a few areas you’re willing to cede control of. Talk through any concerns you have about having things done a certain way or why you have a particular routine. Then trust them to work with you to create a healthy, thriving home. How to thrive in a multigenerational home Making a multigenerational living household work for everyone requires some upfront planning and communication. Even then, the transition may be challenging. But there are ways to lay a foundation for a happy, communicative, and balanced home that supports everyone’s personalities and needs. Here are a few tips on how to achieve that: MAKE SURE YOU HAVE THE PHYSICAL SPACE EVERYONE NEEDS Christine Songco, a certified life and health coach at Third Bliss, grew up in a multigenerational home and currently lives in one as well. She said everyone having their own space and ability to have privacy are crucial to having elderly parents and adult children under one roof. “I’m Filipino and my husband is, too, and it’s expected in our culture to have a multigenerational home to take care of our parents when they’re older,” Songco said. “Living in a multigenerational home, it’s important to have [three to four] rooms because every person in the house needs their own personal space, their own privacy.” If you’re limited on bedroom space — for instance, you have kids and they share a bedroom when grandparents move in — there are other ways to create opportunities for privacy. Ballinger’s family created privacy by setting up hang out spaces in their basement, away from the main floor family room and master bedroom. They also had doors to upstairs mini apartments, and set boundaries around shared spaces. “Healthy, productive communication makes a difference in multigenerational homes.” Ana De La Cruz, Marriage and Family Therapist Other ways to create private spaces is installing accordion doors to section off areas of a room, or putting additions onto the home. You might also consider purchasing an accessory dwelling unit (ADU), which is a small, standalone structure you can add to the property. That can create a feeling of independence for the family members moving into your home, and having fewer people in the main home can allow for more privacy. If you are purchasing a new home, you might look for a property that has a mother-in-law suite, an ADU already installed, or a workshop or space above a garage that can be converted into a living suite. DISCUSS FINANCES UPFRONT Money can be a difficult topic for family members, but ignoring financial questions is a recipe for discomfort, resentment, and conflict. Outline everyone’s expectations before moving in together. For some families, like Songco’s, there may be an unspoken understanding about adult children handling their aging parents’ financial responsibilities. Ballinger’s family also handles most of the financials for her mother-in-law. But when her daughter, son-in-law, and grandchild lived with her, they paid rent and discussed the household finances together. Ballinger put 50% of those rent payments toward the increased household expenses, and 50% into a savings account to help her daughter’s family later on. Discuss financial expectations early on. Will you, or your relatives, pay rent if you’re sharing a home someone already owns? Will you divide grocery and utility bills equally? How will you handle property taxes or home repairs? Hash these questions out early so everyone is clear on their financial obligations. BE HONEST ABOUT YOUR EXPECTATIONS, AND ASK FOR HELP Songco recommends ironing out duties and responsibilities before moving into a multigenerational home. But don’t be afraid to ask for help if your original division of duties isn’t working out. Instead of keeping in your frustrations and becoming resentful or angry, be honest about your feelings and needs. You may be surprised by how many solutions there are to the challenges you’re facing when everyone works together. “The positive is that they’re all together and that depending on what their work schedules are, you can really help with the family dynamics, with dinner, childcare, driving to extracurricular activities,” said Eileen Oldroyd, broker and owner at Oldroyd Realty. “There are so many bonuses to having a multigenerational family together.” You can also lean on family members’ natural abilities, such as tendencies toward cooking, cleaning, budgeting, scheduling, or organizing carpool duties. Let everyone play to their strengths so everyone feels both supported and fulfilled. “You’re not losing your independence. You’re gaining being with those you love, having meals together that you probably wouldn’t have done in the past. The benefits far outweigh the negatives.” Susan Horton, President of the Austin Board of REALTORS BE WILLING TO COMPROMISE Conflict occurs when everybody thinks their perspective is the correct one, De La Cruz said. “The main thing I tell my families is, you have to be willing to be flexible and listen.” Whatever the disagreement is about, there’s always an opportunity to empathize and validate the other person’s feelings. You don’t have to agree with them, but if you really listen to one another, you can find a solution that satisfies both of your needs. In some instances, you may need to compromise. Hold your ground on the things that are most important to you. Kids’ bedtimes, disciplinary strategies, communication styles, boundaries — these are all worth difficult conversations. But if you can give ground on less important issues, or be open to the possibility that doing things differently might be better, you’ll build trust with your family members and create a healthier environment for everyone. “Healthy, productive communication makes a difference in multigenerational homes,” De La Cruz said. “If we’re able to communicate our feelings in gentle ways without having to blame another person or engage in criticism of the actions of someone else, but concentrate on how we feel about a certain situation, [that] makes a huge difference.” Ultimately, remember what you’re gaining by living in a multigenerational home. “You’re not losing your independence. You’re gaining being with those you love, having meals together that you probably wouldn’t have done in the past,” Horton said. “The benefits far outweigh the negatives.” How to find the right home for multigenerational living In the past, homebuyers sought properties with mother-in-law suites built into the home. But Horton said buyers today often look for houses with separate living spaces entirely. Those whose goal is multigenerational living tend to want homes with additional spaces that are essentially mini apartments on the property “with the bedroom, bathroom, sitting area, possibly even a kitchen, and covered patio of its own within seconds of the main quarters,” she said. These might include ADUs or casitas, small independent cottages on the property. Here are some factors to keep in mind when deciding what type of property your family needs. What are the family schedules? If some family members are retired, while others get up early for work, and others have school, having more separation may be the way to go. That could come in the form of a duplex or multifamily home, which would give everyone their own living units while still being under the same roof. “Usually if there’s multiple people living in the home with different schedules, I would aim to show my clients two levels of residences so that one group can live up top and one group can live at the main level and they’re not in each other’s way,” said Jennifer Okhovat, a Los Angeles-area real estate agent. “For example, if somebody has to get up at 5:30 AM for work, they’re not waking up the whole house or going through the entire house to get out the front door,” she said. “That’s also a great reason to have an ADU, and we also see a lot of families that are purchasing duplexes so side by side or upper and lower levels where each family member occupies one of the units.” Consider culture and budget Purchasing a multifamily home, or a home with a guest house or casita, may not be the right move for every family. Oldroyd said it comes down to lifestyle and how everyone gets along. “I’m working with one family that’ll be happy in a traditional three- to four-bedroom home with two or more bathrooms,” Oldroyd said. “But if I were to live with my mom, we would have to have her in a casita. It really depends on the dynamic of what their lifestyles are, and their culture as well. Some cultures are very easy with all being under one roof and other cultures need a little space.” Songco suggested that multigenerational homebuyers consider purchasing a home with at least three to four bedrooms and two bathrooms, plus outdoor living space, to allow everyone privacy and comfort. Opting for a three to four bedroom single-family home may be more affordable for some than purchasing a multifamily property with several units, or a large property with two residential living areas. “It really depends on the dynamic of what their lifestyles are, and their culture as well. Some cultures are very easy with all being under one roof and other cultures need a little space.” Eileen Oldroyd, broker and owner at Oldroyd Realty Get preapproved before you look at properties Before deciding what type of property is best for your family, you’ll want to get preapproved for a mortgage, with everyone who will be on the loan included on the application. If you and your spouse, as well as a working parent or other relative, plan to buy the home together, you may qualify for a larger loan amount than you would on your own. That will likely determine the types of properties you pursue. Make sure everyone who is purchasing and will be living in the home is included in choosing the property. “All generations should be present [during home visits] to make sure that the home works for them,” Okhovat said. Connect with a lender to start the preapproval* process. Start here. Consider your family’s future needs Oldroyd recommended choosing a home that fits your family’s needs now, and that you could grow into and possibly modify in the future. If an older parent is moving in, what will their caregiving needs be in a few years’ time? Do they plan to remain in the home throughout their retirement, or do they plan to eventually move into a senior living community or nursing home? Assuming they intend to age in place in the home, think about the renovations you may need to make eventually. These can include installing ramps to the entrance of the home, grab bars in the showers, or accessible cabinets and other fixtures in the kitchen or bathroom. Keeping your family’s future needs in mind can shape your decision on which home to buy. You might choose a ranch instead of a two-story home, or a two-story home that has bedrooms on the first floor. Or, you might buy a duplex so your parents can live in a ground-level unit. Related reading: Aging in Place: How To Thrive in Your Home Throughout Your Retirement Get to know the home before you renovate You don’t need to make renovations right away. In fact, Okhovat recommends waiting awhile before making any big changes. Once you’ve had some time to settle into the home, you can identify areas that will need to be overhauled for accessibility, as well as places that can be upgraded to give everyone a little more privacy. “The best thing for the purchaser to do is move into the home and see if the space works for them as is before they decide to make changes,” she said. “But simple changes that are really cost effective and can add more privacy include drywall, adding additional bathrooms, and sliding or accordion doors to add an element of privacy to one room.” Other ways to create more spaces: Wall off larger rooms into smaller individual living spaces Add a kitchenette Reconfigure a garage or storage room into an additional bedroom or den Install Murphy beds, which fold up into the wall and can free up more daytime space “Being creative, working with someone who can show you the best ways to use the space you have is really important,” Horton said. “Also consider those screened-in porches…[If] you don’t use it as much, close it in and make it a separate living area for folks staying there so they have a place to enjoy TV or reading.” Loan options for multigenerational housing There are several different loan options for purchasing multigenerational housing, depending on the type of property you want to buy. When you get preapproved, your lender will tell you which loans may be right for you based on the properties you have in mind. Keep in mind that there’s no rule that says every person occupying the home must be on the loan. For instance, adult children can qualify for the loan and let parents live there. The parents do not have to be on the loan or submit income, credit, or asset documentation. Learn more: Can 3 People Buy a House? What to Know About Multiple Owners on a Loan Conventional loans You can use a conventional loan to purchase a single-family home or a multifamily home with up to four units. The minimum credit score requirement for a conventional loan is 620, and depending on the type of conventional loan program you use, up to five co-borrowers may be on the loan. FHA loans FHA loans may be used to purchase single-family homes and multifamily homes with up to four units. Technically, FHA guidelines do not limit the number of co-borrowers on a home loan. However, your lender may set their own limit. The minimum credit score to buy a home with an FHA loan with a 3.5% down payment is 580. But FHA guidelines allow borrowers to qualify with scores of 500-579 if they put down 10%. VA loans Like conventional and FHA loans, VA loans may be used for both single-family and multifamily properties up to four units. The minimum credit score for a VA loan is 580. There is no VA-mandated limit to the number of borrowers on a VA loan, but all borrowers must be eligible for this loan program. VA loans are available to active-duty servicemembers, veterans, and some surviving spouses who have entitlement benefit available. USDA loans USDA loans may only be used to purchase single-family properties. As with FHA and VA loans, there is no hard limit to the number of co-borrowers on a USDA loan, per USDA guidelines. But lenders can enforce their own limits on how many people can be on a USDA, VA, or FHA loan. The minimum credit score requirement for a USDA loan is 640. To qualify, total household income must be below USDA income limits even if not all residents are on the loan. Additionally, total household assets must add up to less than 20% of the purchase price, since the program is reserved for those who have inadequate assets to qualify for conventional financing. Before applying for a mortgage, Oldroyd recommended that anyone who plans to be on the loan organize their income, debts, and financial documents beforehand. Lenders will want to see all borrowers’ proof of income, tax returns, and bank statements. They’ll also pull every borrowers’ credit, and they will use the lowest credit score in the group on the application. Multigenerational living FAQs What is multigenerational living? Multigenerational living refers to two or more generations of a family living together in the same home, or on the same property. What is the key disadvantage of multigenerational living? If there is not adequate space in the home, family members may suffer from a lack of privacy or sense of independence. Emotional conflicts can arise as well, rooted in different expectations, unevenly divided household responsibilities, and a lack of boundaries or respect for boundaries. To avoid these issues, families can purchase homes better suited to multigenerational living or renovate their existing homes to create more opportunities for privacy. What are some advantages of living in a multigenerational household? There are many advantages to living in a multigenerational household, including the opportunity to spend more time with family members and forge deeper bonds. Additionally, relatives may be able to help with household chores and family needs, such as cooking, caregiving, and helping out with children’s schoolwork and activities. There can also be economic benefits to multigenerational living, as family members share household expenses and may be able to alleviate the need for costly daycare or in-home support services for older relatives. Making the best of it Multigenerational living can be incredibly rewarding, despite the challenges it also presents. “Always remember that life is short and every single stage of our lives is temporary,” said De La Cruz. “If we can learn anything from this pandemic, it’s that we can’t buy life. Doesn’t matter how much money we have, what a successful career we have, at the end of the day, we can lose our lives in a blink of an eye, so let’s enjoy each other and every single day with the people that we love and make the best of it.” Thinking about buying a multigenerational home? Get preapproved here. Some references sourced within this article have not been prepared by Fairway and are distributed for educational purposes only. The information is not guaranteed to be accurate and may not entirely represent the opinions of Fairway. Fairway is not affiliated with any government agencies. These materials are not from the VA, HUD, FHA, USDA, or RD, and were not approved by a government agency. *Pre-approval is based on a preliminary review of credit information provided to Fairway Independent Mortgage Corporation, which has not been reviewed by underwriting. If you have submitted verifying documentation, you have done so voluntarily. Final loan approval is subject to a full underwriting review of support documentation including, but not limited to, applicants’ creditworthiness, assets, income information, and a satisfactory appraisal. FURTHER READING 8 minute read Posted on 06/14/2021 Freddie Mac BorrowSmart℠ Program: Up to $2,500 in Closing Assistance Sam Wigness 22 minute read Posted on 06/21/2021 How Much Cash Do You Need For a Conventional Loan Down Payment? Nathan Golden 9 minute read Posted on 06/22/2021 2021 Conventional Loan Limits: How Much Can You Borrow? Sarah Li Cain Popular Links 9 minute read 07/19/2021 Here’s What to Know About the $25,000 First-Time Homebuyer Down Payment Credit 2021 20 minute read 02/01/2021 FHA Loan Requirements 2021 | Rates & Eligibility 22 minute read 06/21/2021 How Much Cash Do You Need For a Conventional Loan Down Payment? 8 minute read 06/29/2021 Family Opportunity Mortgage: Buy a Home for Elderly Parents or an Adult Child With a Disability LOAN PROGRAMS Conventional Loans FHA Loans USDA Loans VA Home Loans Family Opportunity Mortgage Reverse Mortgage Conventional Refinance VA Streamline CONTACT 4750 S. 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