Gifts from a family member are many first-time buyers’ bridge to owning a home. But you don’t always have to be a first-time homebuyer to use a gift for closing costs. Heck, you can get a gift for a second home purchase too!
There Are Important Rules to Remember
One of the key things to remember is that the gift comes from an acceptable donor. A gift needs to be provided by a relative like the borrower’s parents, spouse, child, other dependent, or any other individual who is related to the borrower by blood, marriage, adoption, or legal guardianship. A non-relative who shares a familial relationship with the borrower, like a domestic partner (or relative of the domestic partner), fiancé of the borrower, former relative, or godparent, can also be an acceptable donor.
The gift of funds can be used for all or part of the down payment, closing costs, or financial reserves in accordance with minimum borrower contribution requirements.
But there are two very important guidelines to remember:
- Gifts are not allowed on an investment property.
- The donor cannot be (or affiliated with) the builder, developer, real estate agent, or any other interested party in the transaction.
If you cannot get a gift from a family member and have your down payment ready, then ask about Global Home Finance gifting you the closing costs with our Consumer Closing Costs Subsidy Program. You can change your life or the life of a family member. To talk more about accepting—or giving—a gift that helps build a happy future, schedule an appointment today with Brad Cahoone, Founder of Global Home Finance.
