FHA allows 100% of a down payment to be from “gift funds” from a relative (parent, sibling, aunt, uncle, etc.). Fannie Mae (conventional lending) used to only allow 100% gift funds if the down payment was equal to 20% or more of the purchase price. If a down payment was less than 20%, at least 5% of the down payment had to come from the borrower’s seasoned funds.
This changed recently. Fannie Mae now allows down payments to be 100% gift funds no matter what the down payment percentage is. Hence, a conventional borrower putting down only 10% can now use gift funds for the entire down payment.
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