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FHA down payment as a gift

CAN MY FHA DOWN PAYMENT COME FROM A GIFT?

Yes. There were many years that the down payment could come from just about anyone or anywhere for that matter, but the guidelines have seen some tightening in the last few years. The belief is that people who are invested in something up front are more likely to pay and less likely to end up in default on their loan. FHA seeks to protect the borrower and does not seem likely to stop allowing the down payment to come from a gift, so they have simply made a few guideline changes around accountability for the gift. In short the gift must be sourced.

The gifted down payment money must come from a relative, the borrower’s employer, a charitable organization, government agency, or friend. The funds must also come with a letter that must have the following elements in place –

  • The name, address, phone number, and signature of the person giving the gift.
  • The amount of the gift.
  • The borrower’s name and signature.
  • Statement that no repayment is needed, not even upon sale.

There are many reasons to look into an FHA home loan today. Low or bad credit home loan approvals, low down payments (can come from a gift!), and low interest rates.

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