Weekly Newsletter

 December 21st, 2011

              Last year, 27 percent of first-time home buyers received a financial gift from relatives or friends that they applied toward a down payment on a new home — up from 22 percent in 2009, according to data from the National Association of REALTORS®.
While gift-giving a down payment has increased, those who receive such gifts need to make sure they follow IRS and banks’ gift-giving rules.
 
1. Home owners still need to come up with at least some of the down payment on their own. A spokesperson with Freddie Mac told Newsday that loans backed by Freddie Mac require that when the loan-to-value is greater than 80 percent, the buyer will need to come up with at least 5 percent of the purchase price from his or her own funds. For Fannie Mae loans, Fannie allows all down payment funds to come as a gift on one-unit principal residences. “The thing that is tricky about this is that few people know whether the loan will get sold to Fannie or Freddie,” the Newsday article notes.
2. You may need to document where the down payment money came from. “A gift letter should be signed and dated and include the giver’s name, address, and telephone number, along with his or her relationship to the borrower,” according to Total Mortgage Services in the Newsday article.
3. If you’ve had the gift for a long time, you likely won’t need to document it. If the gift has been in your bank account for three months or longer, it’s considered “seasoned” and doesn’t require a gift letter, lenders say.
                                                                                                                                  Source: Realtor.org
 
Down Payment Gift-Giving Rules

Open Houses

Browse upcoming Open Houses in your chosen area.

Search Open Houses »

Map Search

Find your perfect home in the perfect location.

Search by Map »

School Search

Search for your family’s next home in specific school district.

Search by School »

Create Account

Save your top searches, favorite listings and receive custom updates.

Signup Online »

Get Pre-Approved

Be prepared to make an offer before you find the perfect house.

Get Pre-Approved »

Let's Talk

Need help finding the perfect home? Let me help your search!

Contact me »

Address Search

Need more information about a specific listing?

Search by Address »

Power Tools

Login for access to our powerful home search tools.

Login »

Market Analysis

Information is power! We'll provide you with comparative market analysis for your area.

Request Analysis »

Website Powered by Real Estate Web Solutions

© 2018 Real Estate Web Solutions, LLC. All rights reserved. realOMS Login | Switch Mobile Site