Plus-5
FHA Gift Funds: Two Options You May Not Know About
FHA gift funds aren't limited to someone handing you cash. A gift of equity from a family member - or even a real estate commission gifted by an eligible family member - may help reduce the cash a buyer needs to bring to closing. Here's how these lesser-known options can work.
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Read the transcript
When we talk about gift funds for an FHA loan, you probably picture a parent giving a child money for the down payment. But FHA allows some gifts you may not expect.
For example, if you're buying a home from a family member, that family member may be able to give you some of their equity in the home. Structured properly, that gift of equity could cover your down payment and even help with closing costs.
Here's another interesting one. If your real estate agent is a family member, they may be able to gift their commission toward your funds to close.
FHA does have rules about who can give a gift. Gifts of equity must come from family, while cash gifts can come from a broader group that includes family members and even close friends.
And most importantly, it really has to be a gift. The donor signs a letter confirming that repayment is not required.
And remember - it's always okay to ask. We're here to help you get home.