Does the FHA allow gift funds for down payments?

Yes, the FHA allows gift funds for down payments and closing costs from donors with an interest in the borrower — such as family members, close friends, employers, charitable organizations, and government agencies.

Does the FHA allow gift funds for cash reserves?

Yes, gift funds can be used for many home buying expenses. Higher cash reserves or emergency savings might help you qualify for an FHA if you have a high debt-to-income ratio (DTI).

Can FHA gift funds come from a business account?

In general, the FHA doesn’t care where the donor’s money comes from. As long as you’re not obligated to pay them back and it doesn’t come from someone with a financial interest in the property, your FHA lender will likely accept gift funds from a business account.

Does FHA require bank statements for gift funds?

Yes, the FHA requires a gift letter and a financial statement to show that money went from the donor to you.

Can gift funds be cash in hand?

No, the gift fund cannot be cash. There must be a paper trail, either as an electronic transfer or a check.

Michael Warford

Contributing Writer

Michael Warford is a real estate freelance writer from Montreal. He has written for a variety of digital and print publications, including Homes & Land Magazine Edmonton and Yellow Pages Canada. He was also the Assistant Manager of Content Production at Higher Education Marketing in Montreal, where he developed content for leading colleges and universities. He has a B.A. and M.A. from Concordia University in Montreal.