Seasoning Requirements for Gift Funds (FHA vs Conventional)

[Robert McCormick]

I'm looking to purchase my first property in the very near future. (Duplex househack in North Jersey) I have 5% of the purchase price saved up + enough for closing costs, immediate repairs and reserves (roughly 5 months PITI).

Since the market is so competitive right now I was considering getting funds gifted from a family member, to increase my down payment (an extra 10% to get to 15% combined down) so that my offer would be more competitive. My questions are:

1. Is there a certain amount of time the funds need to be sitting in my account in order to use them towards a down payment?

2. What is the seasoning time period needed for funds in the donor's account?

3. Do these amounts of time vary from Conventional vs FHA?

I appreciate any help that can be offered!

-Rob

[Jeff Shumway]

Hi Rob, the gift funds do not need to sit in your account for a certain period of time. They can be wired directly from the donor's account at closing or the gift donor can deposit them via check/wire (NOT CASH!) into your bank account. The lender will have you fill out a gift letter that states the amount of the gift and from what account number the funds came from. You can do this when you're under contract. You won't get denied due to a large deposit since it's a gift and it's traced.