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Rules For Gift Funds

We have a few borrowers right now navigating the best way to receive gift funds, so we wanted to provide a few reminders.

Gift Funds – a Few Rules of Thumb

For FHA Loans – An entire down payment can be a gift.

FHA Gifts must be “sourced;” this means that the donor or “gifter” must prove the ability to gift with bank statements that verify sufficient available funds for the gift.

For Conventional Loans – The entire down payment can be a gift IF and ONLY IF the down payment is 20% or more. If the down payment is less than 20%, then at least 5% of the down payment must come from the buyer’s seasoned funds.

Conventional Loan Gifts do NOT need to be “sourced,” as long as the gifts are made directly to escrow. The donor only needs to make sure that his or her name is the “remitter” on the cashier’s check made out to escrow.

Jay Voorhees
Founder/Broker | JVM Lending
(925) 855-4491 | DRE# 01524255, NMLS# 335646