Tag: Gift Funds

Freddie Mac – LPA Feedback Message Updates – Effective October 2019 – Dated September 17, 2019

Written by: Lloyd Rutherford, Staff Writer Using LPA correctly is essential to a successful approval with the right conditions. Stay up to date on the latest LPA feedback messaging along with an updated credit risk pricing adjustment matrix. Rule Synopsis: Freddie Mac issued notification that they are updating Feedback messages effective October 1, 2019 to […]

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Gift Funds as Reserves

Question: Does any program allow gift funds to be used for required reserves? Answers: Both Fannie Mae and Freddie Mac allow gift funds to be used as reserves. VA does not allow gift funds to be used as reserves. FHA will allow gift funds to be used as reserves but ONLY if the loan is […]

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FHA – Donor Gift Funds – Alternative to Bank Statement: Will FHA accept a statement from the donor’s bank letterhead with the account number, owner of account, and a statement that the balance is greater than “X” which is the amount of the gift? [Gift Funds and Gift of Equity Chart]

Answer: While FHA doesn’t provide detailed instructions on documentation from alternative accounts, the guideline does state: If the gift funds are not verified in the Borrower’s account, obtain the certified check or money order or cashier’s check or wire transfer or other official check evidencing payment to the Borrower or settlement agent, and the donor’s bank […]

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FHA Info # 19-09 – FHA Updates to Handbook 4000.1- March 27, 2019 – Effective March 27, 2019. [NEW – 4000.1 Handbook Old Guidance vs. New Guidance Chart]

Written By: Tracey Rumsey, Staff Writer With no notice and a 1030-page transmittal discussing the clarifications in the handbook, FHA blindsided the industry.  Our FHA expert painstakingly went through the entire transmittal to create this article and accompanying chart to help you get to the bottom line and understand what changed.  This is a must […]

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VA – Acceptable Source of Gift Funds: Who is allowed to give a VA borrower gift funds? [Gift Funds & Gift of Equity Chart]

Answer: As long as you can satisfy the document requirements listed, the gift funds should be acceptable to the VA underwriter.  VA has always allowed gifts, they just relied on VA underwriters to use basic industry practices to underwrite files. Documentation Requirements: Evidence of the borrower’s deposit, or A copy of the donor’s funds by […]

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