Posted on: 19th Dec, 2013 12:45 am
How much of a down payment can come as a gift? Also, how long should it have to age, if any?
Hi Sonora,
You may be able to get a gift of 20% down payment but you will have to show the source of the gift.
Thanks,
Jerry
You may be able to get a gift of 20% down payment but you will have to show the source of the gift.
Thanks,
Jerry
The entire down payment can be a gift on both FHA and conventional loans, in most BUT NOT ALL cases. Typically, if the "gift" has not been seasoned (deposited into your bank account) for at least 60 days, you will have to show a paper trail.
Yes, I agree to what Lucie Eliott and Jerry has said. You can easily pay down the amount by utilizing the proceeds of a gift but yes, you have to show the source of the gift.
With FHA mortgages, ALL of the down payment may be a gift.
With conventional mortgages, if the gift is for a down payment of 20% or more, the entire down payment may be a gift.
If the down payment is less than 20%, then at least 5% must be your own funds and the rest can be a gift. This is the policy for most lenders.
Fannie Mae actually allows a 5% down payment with all 5% being a gift but only for single family purchases and your credit score must be 740 or higher and only one of the PMI companies insures it. Most lenders will not do it, but, some will.
The gift must be documented as received, not seasoned any more than the date of receipt.
With conventional mortgages, if the gift is for a down payment of 20% or more, the entire down payment may be a gift.
If the down payment is less than 20%, then at least 5% must be your own funds and the rest can be a gift. This is the policy for most lenders.
Fannie Mae actually allows a 5% down payment with all 5% being a gift but only for single family purchases and your credit score must be 740 or higher and only one of the PMI companies insures it. Most lenders will not do it, but, some will.
The gift must be documented as received, not seasoned any more than the date of receipt.
