Conventional Loans & DP

[Anonymous]

Can a downpayment for a conventional loan be a gift from a family member, like you can with FHA?

Can a downpayment for a conventional loan be a loan from a family member?

And do lenders care if where the funds for the closing costs come from?

Just trying to get all my facts straight before I see if buying a home is doable in 2009.

Thank you!

[ShanetheMortgageMan]

You can get a gift for a purchase with conventional financing but the gifting rules are different.  With conventional financing, if the entire down payment is less than 20%, and you are getting any amount as a gift, then you must put at least 5% down from your own funds.  If the total down payment is 20% or more, then the entire down payment amount can be a gift.  The exception is on the MyCommunity & HomePossible programs the entire down payment (regardless of how much the total down payment is) can be from a gift from family, relatives, etc.

Non-secured loans generally are unaccaptable for down payments on conventional financing, including family member loans, signature loans, cash advances, or similar types.  Secured loans, such as from a retirement account, another property (such as you take a loan out on a second home to buy a new home), against a life insurance policy, etc. are OK though.

Lenders definitely care where your funds to close come from.  Prepare to provide 2 or 3 months of bank statements for all accounts you want to use to help qualify.

[Anonymous]

Thank you!  In regards to the closing costs, do they have the same rules about it not coming from a family member, as a gift, or not a loan from a family member? 

[ShanetheMortgageMan]

You are welcome; yes same rules for closing costs as down payment for conventional gifting guidelines.

[Anonymous]

Thank you!