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FHA UPDATE
The Federal Housing Administration (FHA) has recently updated its policies regarding gift funds for home buyers. Under the new update, donors providing gift funds for a buyer’s down payment are no longer required to provide bank statements. This change simplifies the process for those receiving financial assistance from friends or family members, making it easier to secure an FHA-insured mortgage.
Key points about this update:
- No Bank Statement Requirement: Donors do not need to submit bank statements to verify the source of their gift funds.
- Gift Letter: A gift letter is still required, which must include the donor’s name, contact information, relationship to the borrower, the amount of the gift, and a statement that no repayment is expected.
- Documentation: Borrowers must provide documentation of the transfer of gift funds, such as a copy of the donor’s check and the borrower’s deposit slip, or a copy of the donor’s withdrawal slip and the borrower’s deposit slip.
This update aims to streamline the process for borrowers using gift funds, reducing paperwork and potential delays. For more detailed information, borrowers and lenders should refer to the latest FHA guidelines or contact their mortgage lender.
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3 Replies
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Many donors do not want to provide their bank statements or Financials. This is a great change for the better. Thanks for sharing.
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Wow. Great update and information Rhonda.
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I had a deal one time. Where parents had no problem gifting money. But was like pulling teeth to provide proof they had the funds to give.