Many states, such as Colorado, offer down payment assistance programs, or even county bond programs, such as the El Paso County Bond program. But sometimes a family member is interested in gifting you down payment money. It's important to understand the guidelines of a gift for down payment will vary by the financing vehicle you choose.
Below is a comparison chart to help you make your decision on which is best for you.
Agency |
Acceptable Donor |
Guideline Specifics |
|
Fannie
B3-4.3-04
|
- A relative, defined as the borrower’s spouse, child, or other dependent, or any individual who is related to the borrower by blood, marriage, adoption, or legal guardianship;
- Fiancéor fiancé or domestic partner
- The donor may not be, or have any affiliation with, the builder, the developer, the real estate agent, or any other interested party to the transaction.
|
- Primary and second home purchase only
- Not considered an Interested Party Contribution
- Gift letter required
- Minimum borrower investment of 5% is required for second home if LTV is >80%.
|
|
Freddie
5501.3
|
- A relative, defined as the borrower’s spouse, child, or other dependent, or any individual who is related to the borrower by blood, marriage, adoption, or legal guardianship;
- Fiancé or fiancée or domestic partner
|
- Primary and second home purchase only
- Not considered an Interested Party Contribution if the seller is not, nor has any affiliation with, an interested party
- Gift letter required
- Minimum borrower investment of 5% is required for second home if LTV is >80%.
|
|
FHA
4000.1, II, A, 2, b, ii, (A)
4000.1, II, A, 4, d, iii, (F)
|
Family member defined as
- child, foster child, parent, or grandparent;
- spouse or domestic partner;
- legally adopted son or daughter, including a child who is placed with the borrower by an authorized agency for legal adoption;
- brother, stepbrother, sister, stepsister;
- uncle or aunt
- son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law of the borrower.
|
Limited to 85% LTV unless:
- Residence is currently selling-family member's primary residence, or
- Purchasing family member has been renting residence 6 months prior to sales contrac date.
- Gift letter is required.
|
|
VA
Details on VA loans
|
No specific guidelines |
Would be subject to the 4% seller contribution limit and may be considered an inducement to purchase. |
|
USDA
3555, 9.3, E
|
n/a |
Gifts may not come from the seller. |
For more information on Colorado Home Loan options, contact me. Or call a local lender licensed in your area.
*Chart provided courtesy of and with permission from MortgageCurrentcy.com
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