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How Do I Receive A Cash Down Payment Gift For A Home?

I was told by a co-worker there's a way to receive a "cash gift" for my down payment, but there are guidelines that must be followed, including a letter. What are the guidelines and do Lenders still consider cash gifts for down payments? by dan358 from Anaheim, California. Feb 27th 2018 Reply


Elva Wormley (ElvaWormley)
#815 ranked lender in California - 27 contributions

Hi Dan, with conventional and government loans, the lender must document the source of the down payment. The person giving the gift would have to provide their bank statement and sign a gift letter. So, the cash would have to be deposited into their bank account first. Any single deposit into your bank account that exceeds 50% of the total monthly qualifying income for the loan must be sourced and documented.

Feb 27th 2018
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Edward Megerdichin (Megerdichian)
#832 ranked lender in California - 1 contribution

Hello Dan - Gift money as down payment is an acceptable source. If the down-payment is 20% or more and the subject property is 1-4 Units, including 2nd homes no minimum borrower funds are needed... The whole down could be gift. We would need a gift letter to be signed by the donor and we would advice the donor to wire the gift funds to the escrow before closing. If the gift/down amount is less than 20%; and if the subject property is a 2-4 unit property then we need a minimum of 5% of borrower own funds and remaining could be a gift. The FHA Loans by the way do not have a minimum borrower contribution for any type of 1-4 Units ... Hope this helps ... call me anytime (818)279-2450 Direct - Edward Megerdichian, NMLS 240088 NewPenn Financial - Pasadena, CA

Feb 27th 2018
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,414 contributions

More info needed,, But in general, Gifted funds for a down payment is allowed, but the guidelines are different depending on the loan product you are applying for *(conventional, FHA, VA, USDA).. Guidelines regarding who can donate also vary depending on the loan product you go with.. But regardless of the loan program, they all require the funds to be sourced.. so if you're talking about "Cash" as in crisp $100 bills, then no.. but if you are talking about getting a gift from a potential donor who writes a check from their own account, then yes.. that is allowed.. The donor will need to prove that the funds are theirs to donate, and they must sign a document stating that the funds are a gift and are not subject to repayment. I'm a preferred Lender with California and Arizona being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com NMLS# 226347 / RPM Mortgage NMLS 1541014 / AZMB0121893

Feb 27th 2018
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