Did you know that at MortgageDepot, we DO NOT require proof of donor ability when a gift is given? This is a significant advantage for many homebuyers who receive financial gifts from family or friends to help with their down payment or closing costs. Understanding the nuances of gift fund requirements can be a game-changer in your home-buying journey, and we’re here to make it as smooth as possible.
Navigating Gift Fund Requirements
When it comes to conventional loans, Fannie Mae and Freddie Mac have specific requirements for gift funds. Here’s what they typically need when a borrower receives a gift from an acceptable donor:
- Gift Letter: A statement indicating that the gift does not need to be repaid.
- Source of the Gift: Information such as the bank name and account number.
- Donor’s Withdrawal Slip and Borrower’s Deposit Slip: Proof of the donor’s withdrawal and the borrower’s deposit.
- Donor’s Check and Borrower’s Deposit Slip: A copy of the donor’s check and the borrower’s deposit slip.
- Proof of Wire Transfer: Documentation showing the transfer from the donor’s account to either the borrower’s account or the settlement agent’s account.
- Copy of Donor’s Check to the Settlement Agent**: If applicable, a copy of the donor’s check to the settlement agent.
FHA Loan Specifics
For FHA loans, the requirements are a bit more stringent. The Federal Housing Administration (FHA) specifically states that the donor must provide a bank statement at the time the gift is given. Additionally, any deposits must be sourced or explained. While the FHA does not explicitly state a 30-day requirement, it has been confirmed that this is the standard documentation time period for loan scalability.
Whether you’re a first-time homebuyer or looking to refinance, our team is dedicated to helping you navigate the mortgage landscape with ease. Contact us today to learn more about how we can assist you in securing the financing you need.