March 20, 2012
A reader asks, “I am in the process of buying a home and trying to get an FHA loan. The mortgage company said we could no longer use gift money for down payment that we had to have the money in our bank account for 60 days. We got a gift of $30,000 to put on our house. What are the rules for FHA?”
The FHA has specific rules covering gift funds for down payments. According to the HUD Homeownership Center Reference Guide, Chapter Two, Mortgage Credit Guidelines, the rules are clear:
“HUD does not approve down payment assistance programs in the form of gifts administered by charitable organizations. (HUD defines charitable organization as “an organization who has
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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