A gift for me? Oh, you shouldn't have!

We all need a little help every now and then. Sometimes that help comes in the form of money! Ever thought about buying a home but did not have all of the down payment right now? The $7,500 first time homebuyers tax credit can be a great help. You can borrow your down payment from a relative and then pay them back using part of that credit. One of our lenders sent us this handy info which is below- list of the people that you are allowed to borrow the money from, for specific loans.


Conventional - Owner Occupied Property (this means that you are living in the house as your own home, meaning not renting it out):

• Relatives
• Domestic partner
• Fiance
• Church
• Municipality
• Nonprofit organizations

The rules are different if this is a second/vacation home or an investment property.
If the LTV/CLTV is 80% or less, the entire down payment may be a gift. Otherwise it is 5%.

Investment Only - Gift funds allowed only under the following conditions:
1-unit Single Family Residence (SFR)/condo/Planned Unit Development (PUD)
Maximum LTV of 70%
Minimum down payment of at least 30%, of which at least 20% must come from the Borrower's own funds




FHA (3.5% down)- Owner Occupied Property:

• A relative of the borrower.
• The borrower's employer or labor union.
• A charitable organization that does not receive funding from seller/builder contributions (see below).
• A governmental agency or public entity that has a program to provide homeownership assistance to low and moderate income families or first-time homebuyers.
• A close friend with a clearly defined interest in the borrower.

A gift from any other source is considered an inducement to purchase and requires a reduction to the sales price.

Donors may borrow gift funds from an acceptable source, i.e., not from a party to the loan transaction including the mortgage lenderPlease be aware of the difference between the two.

These are rules for all lenders that use FHA or Fannie Mae(which is pretty much the two agencies the majority if not all lenders are using)Everything is a paper trail and most lenders if not all will want to see a two month period possibly three. Unusual deposits that are not consistent with normal direct deposits or can be verified the borrower better be able to explain where the deposit came from and document. This is how lending is these days.


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If you have questions about getting pre-approved for a mortgage or down payment stuff (or you were just confused by this whole post) feel free to contact me at rupton@c21scheetz.com