Schizophrenia and affective disorder are two major complex mental disorders with high heritability. Evidence shows that rare variants with significant clinical impacts contribute to the genetic liability of these two disorders. Also, rare variants associated with schizophrenia and affective disorders are highly personalized; each patient may carry different variants. We used whole genome sequencing analysis to study the genetic basis of two families with schizophrenia and major depressive disorder. We did not detect de novo, autosomal dominant, or recessive pathogenic or likely pathogenic variants associated with psychiatric disorders in these two families. Nevertheless, we identified multiple rare inherited variants with unknown significance in the probands. In family 1, with singleton schizophrenia, we detected four rare variants in genes implicated in schizophrenia, including p.Arg1627Trp of LAMA2, p.Pro1338Ser of CSMD1, p.Arg691Gly of TLR4, and Arg182X of AGTR2. The p.Arg691Gly of TLR4 was inherited from the father, while the other three were inherited from the mother. In family 2, with two affected sisters diagnosed with major depressive disorder, we detected three rare variants shared by the two sisters in three genes implicated in affective disorders, including p.Ala4551Gly of FAT1, p.Val231Leu of HOMER3, and p.Ile185Met of GPM6B. These three rare variants were assumed to be inherited from their parents. Prompted by these findings, we suggest that these rare inherited variants may interact with each other and lead to psychiatric conditions in these two families. Our observations support the conclusion that inherited rare variants may contribute to the heritability of psychiatric disorders.