Gift donor’s source of funds and ability to donate.
As a general rule, FHA is not concerned with how a donor obtains gift funds, provided that the funds are not derived in any manner from a party to the sales transaction. Donors may borrow gift funds from any other acceptable source, provided the mortgage borrowers are not obligors to any note to secure money borrowed to give the gift. The following are rules of thumb followed by most lenders today:
- Evidence of donor’s withdrawal of funds (e.g. Copy of donor’s canceled check, bank statement or bank-validated withdrawal slip).
- If donor’s statement shows a recent large deposit, FHA requires evidence of the source of deposit
- Cash-on-hand is never an acceptable source of donor’s gift funds
- Evidence of deposit into borrower’s account is required.