[noppenbd]

I'll throw my 2 cents in. Here's what I would do if it were me. Suggest your father discount the house by $24000. You could ignore the realtor fee issue (which could be a bit messy in an audit) and just have him give you and your husband $12K each. Assuming you can save around $40K by the time of the sale that gives you a $236K mortgage which is completely reasonable for $110K a year income. Your PITI would be around $1500, which is only 16% of gross, well within guidelines.

Then to make it equal your dad only has to give out $24K to the remaining 3 couples. This comes out to $72K, which dents your father's nest egg a lot less. You could even argue that since he is avoiding realtor's fees he is not out the whole $24K that he is giving you, but I'm not sure I would go down that route.

Then down the road if he really doesn't need the money, I'm sure he will find a way to get it distributed (either before or after he passes). Then at that time you can pay down the principal if it makes sense.

EDIT: I reread and realized your income won't be $110K until May 2009. But I think you could either wait until then (and pay your dad some rent) or try and qualify just on your income. With $58K income PITI comes out to 31% which is borderline, so you may have to check with some mortgage lenders to see if it will work.