Real Estate Links and Reports

Rules for Gifts for FHA Purchasers

The gift can cover the entire down payment and closing costs.

Acceptable Gift Donors

Relatives are defined as those related by blood, marriage, or legal guardianship:
Examples include parents, spouse, children, brothers, sisters, grandparents, aunts, uncles, and cousins. Fiancées are acceptable.  
Domestic partners may be acceptable if it can be documented they have been living with the customer 12 months (examples include, but are not limited to, signed lease, driver's license).  

Gifts may come from friends, employers as long as there is a long standing relationship.

Documentation Required
The customer must list the name, address, telephone number, relationship to the customer, and the dollar amount of the gift on the loan application or in a gift letter for each cash gift received.  

The gift funds must be documented by obtaining a gift letter signed by the donor and customer that includes the following:  

1.The specific dollar amount of the gift
2.The donor's statement that no repayment is required
3.The donor's name, address, telephone number and the nature of the donor's relationship to the customer       The gift donor may not be a person or entity with an interest in the sale of the property, such as the seller, real estate agent or broker, builder, loan officer or any entity associated with them. 
 4.If sufficient funds required for closing are not already verified in the customer's accounts, document the transfer of the gift funds to the customer via the following:

If the gift funds are in the customer's bank account, document the transfer of the funds from the donor to the customer by obtaining a copy of the canceled check or other withdrawal document showing that the withdrawal is from the donor's account. The customer's deposit slip and bank statement that shows the deposit is also required.

If the gift funds are to be provided at closing and the transfer of the gift funds is by certified check made on the donor's account, a copy of the bank statement showing the withdrawal from the donor's account as well as a copy of the certified check is required. If the donor purchased a cashier's check, money order, or official check as a means of transferring the gift funds, then the donor must provide a withdrawal document or canceled check for the amount of the gift showing the funds came from the donor's personal account.

If the donor borrowed the gift funds and cannot provide documentation from the bank or other savings account, the donor must provide written evidence that the funds were borrowed from an acceptable source (i.e. not from a party to the transaction). "Cash on hand" is not an acceptable source of the donor's gift funds.

Terry Zybko-Peglow
Coldwell Banker Residential Brokerage
140-A South Roselle Road
Schaumburg, IL 60193

Office: (847) 301-3100
Direct: (847) 301-3108
Cell: (847) 476-1147
Email: Terry@LivingintheBurbs.com

Home - Back to Reports