Documentation Needed for Gift Funds on a Conventional Loan:
Below are the three steps required to document gift funds properly. All three are necessary for the funds to be verified and can vary based on the method by which the funds are gifted to you.
#1: Completed Gift Letter Link to Gift Letter The gift letter must be fully completed and signed/dated by the donor and you. Gift funds must come from the bank account listed on the Gift Letter.
#2: Gift the Funds –Timing is critical and a part of the underwriting process. Please execute the fund’s transfer as soon as you find your new home and the home inspection is cleared.
Option A- The donor writes a personal check to you. We only need a copy of the front and back of the check once it clears the donor’s bank account.
Option B- The donor wires the funds directly to the title company. Please let me know if you desire this option, and I will send you the title company’s wiring instructions.
Option C- (least desirable) The donor electronically transfers the gift funds directly into your account. In this case, we will need a complete 30-day bank statement from the donor demonstrating they had the funds to gift. WARNING! By using this option, your donor will be required to send in a full, unaltered bank statement or authorize Finicity or Automated Asset Verification.
Step 3- Evidence of Receipt of Gift Funds –
Using Finicity or Automated Asset Verification- No further action is required.
Not using Finicity or Automated Asset Verification– Once the funds show as a posted deposit into your account, we will need a bank transaction summary (dating back to the closing date of the last full bank statement you sent to me). Please be sure the summary shows the bank name, at least the last 4 digits of your account number, the available balance, and the URL that appears at the bottom of each page. Please note: Screenshots are not acceptable.
Documentation Needed for Gift Funds on FHA, USDA, or VA Loan:
Gift documentation is very particular, so we have listed the 4 steps needed to document a gift properly. All 4 steps are necessary for the use of funds, and they vary based on how the donor gifts the funds and if you use Finicity or Automated Asset Verification.
Step 1- Completed Gift Letter Link to Gift Letter The gift letter must be completed in its entirety and signed/dated by the donor and you. Note: the gift funds must come from the bank account listed on the Gift Letter.
Step 2- Evidence of Donor Funds –We will need a 30-day account history from the donor using one of the following methods.
A. Donor authorizes us to use Finicity or Automated Asset Verification.
B. Most recent full, unaltered bank statement (all pages).
C. A 30-day printout from the internet. It must identify the donor by name, must have the bank name, a partial account number and show the available balance. Please note: screenshots are not acceptable.
D. A teller signed statement. Again, it must be a 30-day statement and stamped/dated by the bank teller.
Step 3 (2 parts)- Evidence of Funds transfer/withdrawal from Donor’s account
A. If the donor uses Finicity or Automated Asset Verification, no further action is required.
B. If the donor provided you a personal check, we will need a copy of that check (front and back) once it clears the donor’s account.
C. If the donor electronically transfers funds into your account, we will need a teller-signed summary of the withdrawal or an online bank transaction summary from the donor documenting the withdrawal of funds. Please be sure to follow the same guidelines as above with regard to online bank transaction summaries. Both summaries (teller signed or online) require that it dates back to the closing date of the full bank statement provided.
Step 4- Evidence of Receipt of Transfer of Funds – Proof from you that you received the funds.
- Finicity or Automated Asset Verification– If the donor provided a personal check, we would need a copy of the deposit slip.
- Not using Finicity or Automated Asset Verification– We will need a copy of the deposit slip and a bank transaction summary following the same guidelines as above for either an online summary or a bank teller-stamped summary from your account.