FHA Loan With Gift Down Payment

[Anonymous]

Here's the scoop:

My boyfriend and I have lived together for 8 years, but are not married. We have a child together. I am buying a house in my name only. He started his own business and is doing really well, but I cannot get a mortgage with him because he has been self employed for less than a year.

I was recently pre-approved for an FHA loan. We found a house we liked and put in an offer.

My downpayment will be gifted from my boyfriend. My credit score is 650. My debt to income ration is 48%. I do not have any savings, but all my payments have been on-time for the last 6 years.  I do have an IRA and a 401(k).

I am so afraid my loan is going to get denied because of my debt to income ratio and my lack of savings. Is there any way I can somehow account for the money my boyfriend contributes to the household? I was thinking in terms of a child support agreement bewteen us?

Please tell me your thoughts. I meet with the LO later this week and my stomach is in knots! I do not want to lose my earnest $$!

The house payment on this house will be the same as our rent, so I know we can handle the payment...hoping the underwriter will think so too.

[ezdriver]

My recommendation is to put the money into your account and let it sit for 60 days ... called seasoning. That way you won't have to come up with any documentation for the underwriters.

[Anonymous]

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ezdriver wrote:

My recommendation is to put the money into your account and let it sit for 60 days ... called seasoning. That way you won't have to come up with any documentation for the underwriters.

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We do not have 60 days to season the money because the offer was accepted. I didn't even think to do that beforehand. We came into this slightly unprepared.

[DallasLoanGuy]

the gift from the bf will be considered allowable funds.

if approved thru automated underwriting, then the 48% isnt a problem.

just apply

[ezdriver]

OK ...

The best that you can do is to write a letter of explanation stating the truth ... that your boyfriend is gfting the downpayment to you. It is up to the underwriter. The LO will be able to shed some light on the situation but I think that you will be ok. I pulled the info below from the FHA website.

4155.1 5.B.4.b
Who May
Provide a Gift
An outright gift of the cash investment is acceptable if the donor is
 the borrower’s relative
 the borrower’s employer or labor union
 a close friend with a clearly defined and documented interest in the borrower
 a charitable organization
 a governmental agency or public entity that has a program providing home
ownership assistance to
 low- and moderate-income families, or
 first-time homebuyers.

[Anonymous]

I met with my LO yesterday, and he said he really doesn't see any reason that this loan won't get aprroved by the underwriter. I feel a little better, but I know it's not over until the closing papers are signed!

He gave me a form letter for my fiance to fill out, and he wants us to print off the canceled check from his bank showing that the payment came from his account to mine. I'll keep everyone posted.