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Gift Funds Should Go Straight to Escrow, Not Into Bank Account

We are seeing buyers use gift funds more often than ever lately. This is a reminder that it is much easier if borrowers wait until they are in escrow before receiving gift funds. The funds can then be deposited by the donor or “gifter” directly into escrow.

For conventional loans, when gift funds are deposited into a borrower’s bank account, we need both a gift letter AND a copy of the donor’s bank statement (proof of funds). When gift funds are deposited directly into escrow, we only need a gift letter (no bank statement).

For FHA loans, we need the donor’s proof of funds or bank statement no matter what.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646