Tuesday, November 24, 2009

Gift Fund Requirements For Conventional Conforming Loans

Gift Funds

Gift Funds

Type

Owner-Occupied

Second Home

Investment

Source


 


 

• Relatives


 

• Domestic partner


 

• Fiancé Fiancée


 

• Church


 

• Municipality


 

• Non-profit organizations

Relatives only

Not Allowed.

Percentage of Borrower's Funds

Minimum 5% down payment must be from the borrower's own funds.

Note:

If the LTV/CLTV is less than or equal to 80%, the entire down payment may be a gift.

Minimum 5% down payment must be from the borrower's own funds.

Note:

If the LTV/CLTV is less than or equal to 80%, the entire down payment may be a gift.

N/A


 

Gift Fund Requirements:

Gift funds must be documented by a letter signed by the donor and include the following information:


 

Gift Funds from a Relative:


 

• The dollar amount of the gift and the date funds were transferred.


 

• The donor's name, address, telephone number & relationship to the borrowers.


 

• State that no repayment is expected or required.


 

• Identify the subject property being purchased.


 

Gift Funds from a Municipality or Non-profit Community Organization:


 

• That the funds were provided by a municipality or non-profit community organization.


 

• The donor's mailing address.


 

• A statement that no repayment is required.


 

• Funds were received by the borrower or the property seller on the borrower's behalf.


 

Requirements for Grants

Grants provided by a church, municipality or non-profit organization must be documented by:


 

• A copy of the letter awarding the grant.


 

• A copy of the legal agreement establishing the terms and conditions under which the funds are grated, OR


 

• Evidence of the transfer of funds.


 

• The documentation must specify the amount of the grant, how the funds will be transferred and that no repayment is expected.

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