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Is there a minimum amount of money someone else can contribute to help me with my down payment?

A lot of borrowers aren’t always able to come up with all the funds they need for a down payment on their own, which is why many mortgage products allow for gift contributions from friends and family.

But, while it may seem perfectly OK to accept these gifts, be sure to read the fine print of the mortgage product you’re considering. While some conventional and unconventional mortgages products allow you to receive gift contributions with no strings attached, others either have more stringent requirements or do not allow gift contributions. See below:

  • Fannie Mae (Conventional): A borrower of a mortgage loan may use a monetary gift for all or part of the down payment, closing costs, or financial reserves. For more detailed information on contribution requirements click here.
  • Freddie Mac (Conventional): A borrower is required to contribute at least 5% of their own personal funds to a down payment before accepting a monetary gift. However, if 80 LTV then the borrower doesn’t need to contribute any of their own funds. For more information click here.
  • FHA: A borrower of a mortgage loan may use a monetary gift for all or part of the down payment, closing costs, or financial reserves.
  • USDA: While down payment is not required for this type of loan, gift funds are allowed for all of your down payment should you choose to put money down. Gift money can also be used for closing costs.
  • VA: While down payment is not required for this type of loan, gift funds are allowed for all of your down payment should you choose to put money down. Gift money can also be used for closing costs.

 

To learn more about the mortgage application process, be sure to speak with an experience mortgage broker.

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