Gift funds are allowed on FHA/VA/USDA loans from family members or employers with very little restriction as long as it’s well documented. The most common problem is when the donor doesn’t want to source the funds by giving their bank statement.
Conventional loans and PMI companies for conventional loans may have restrictions where the buyer must contribute a certain amount of funds. Each PMI company has their own guideline which overlays conventional guidelines. Fannie and Freddie also have different guidelines on this topic, but a safe rule to go by is 5% must be contributed by the buyer to use gift funds OR the gift must be for 20% or more of the purchase price. Again, this only applies to conventional loans, not FHA/VA/USDA.
If you have questions on mortgages or to help you brainstorm on your financing situation. Contact us today. 206-334-8773
Posted via Seattle Real Estate-Seattle Homes For Sale
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