You may use a gift of funds to buy a home to use as a primary residence. You may no longer use a gift to buy an investment property or even a second home as you good just last year.

 

A gift is money received from a family member that does not need to be paid back. The definition of a family member is a blood relative, legal guardian, married partner, domestic partner, or fiancé, or from a church or non-profit organization. That is a lot of people to ask for a handout when buying a house!

 

Just make sure that it is a “gift” and you do not need to pay it back! What is a gift? Money you do not need to pay back now, even if they start bugging you next year.

 

The gift must be documented and not simply cash in a shopping bag or you saying your uncle giving you $10,000.

 

How do you document the gift?

 

·         Copy of the check from the donor to you

·         Copy of the deposit slip showing the money went into your bank account

·         Proof the money is still in your bank account

·         Copy of the gift givers’ bank account showing they really did have the money in the account to give you!

·         Affidavit from the donor stating they gave you the money and you do not need to pay it back

 

Why do you need to do all of this? Because there are bad people out there that launder money or have cash in box they got from selling drugs or guns. The law says that you are not allowed to use illegal income as funds to buy a home. Imagine that!

Dale Siegel