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.