GIFT  MONEY

A gift  may be used for part of the down payment  and closing costs .  Only "blood" relatives can give a gift .  If the LTV  is under 80%, you don't need any of your own money.  However, if the LTV  is over 80%, you must have at least 5% of your own funds.

 I Have GIFT  Money….now What?

Under normal FNMA  Gift  rules, a gift  can only be given by a blood relative (parent, grandparent, aunt, uncle, cousin) and only if you have 5% of your own funds into the transaction.  For FHA  loans, the entire down payment , points, closing costs  and escrows (i.e. everything) may be a gift (which is another plus for applying for an FHA loan)

The following procedure should be followed for verification of gift  money.

1.      Send in the signed gift  letter.  We will provide you with is form.

2.      Provide proof of donor’s ability.  Provide a bank statement showing at least the amount of the gift  in the donor’s bank account.  This amount must have been in the account for the past 3 months.  Funds can not just show up.  If they do, we will need to verify from where those funds came too.

 3.      Provide a withdrawl slip from the donor’s bank account in the amount of the gift  indicated on the        gift letter.

 4.      Provide a copy of the Gift  Check before you deposit it into your account.

 5.      Provide a deposit slip showing the gift  deposited into your account.

 6.      Provide a current bank statement from your account showing the gift  deposit.

*Note:   Any large deposits into the donors account not associated with the gift  will be questioned and you will be asked to provide an explanation as to the origin of the funds.

For more information, please call DAN PALUMBO at 1-800-817-8743.

Licensed Mortgage Banker - New Jersey Department of Banking and Insurance; Licensed by the Pennsylvania Department of Banking; Virginia Licensed Mortgage Lender