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FHA 4000.1 Gift guidelines clarification 04/27/2017

Dave Vawter -

We received clarification from HUD that the red items are required when sourcing donor funds

Documenting the Transfer of Gifts The Mortgagee must verify and document the transfer of gift funds from the donor to the Borrower in accordance with the requirements below. 
 
a. If the gift funds have been verified in the Borrower’s account, obtain the donor’s bank statement showing the withdrawal and evidence of the deposit into the Borrower’s account.
​*** 30 days of bank statements Showing the withdrawal  a cancelled check is not acceptable ​
 
 b. If the gift funds are not verified in the Borrower’s account, obtain the certified check or money order or cashier’s check or wire transfer or other official check, and a bank statement showing the withdrawal from the donor’s account.
​*** 30 days of bank statements Showing the withdrawal  a cancelled check is not acceptable ​
 
 If the gift funds are paid directly to the settlement agent, the Mortgagee must verify that the settlement agent received the funds from the donor for the amount of the gift, and that the funds were from an acceptable source.
 ​*** 30 days of bank statements Showing the withdrawal  a cancelled check is not acceptable ​
 
 If the gift funds are being borrowed by the donor and documentation from the bank or other savings account is not available, the Mortgagee must have the donor provide written evidence that the funds were borrowed from an acceptable source, not from a party to the transaction. The Mortgagee and its Affiliates are prohibited from providing the loan of gift funds to the donor unless the terms of the loan are equivalent to those available to the general public. Regardless of when gift funds are made available to a Borrower, the Mortgagee must be able to make a reasonable determination that the gift funds were not provided by an unacceptable source
 
VOD's will not work - nor will a cancelled check or letter from bank stating they have to funds to give.
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