When is gift money no longer a gift?

[Jaimyn Chang]

Hoping I can get a clear answer on this. Thanks in advance.

I am trying to get a 25% conventional mortgage on a duplex that costs $80K. The bank is telling me the down payment can’t be gifted. I have a substantial amount of gift money being deposited into my account soon. I want to use that money to purchase properties. 

Some fellow investor friends of mine are telling me I have to wait 2 years before the gift money is no longer seen as a gift by the bank. Others are telling me I can just let the money season in my account for 2-3 statement cycles. Even two different accountants gave me different answers.

Anyone know how long I’ll have to wait?

[Bill Hamilton]

Well, it can vary depending on the bank. Also, keep in mind that when an accountant talks about gift money, they are, thinking about it from a tax perspective rather than a lending requirement. But generally, it's a 60 day seasoning period to not have to consider it a gift. In reality, if you can show two consecutive bank statements with the money in that account (not including the actual deposit) then it is considered "seasoned" rather than being gift funds. Many banks would also be fine if for instance, you showed a deposit on March 15th and still showed that money in there on May 17th. But it's simpler if you have two months of statements that don't show the deposit but just show the money in the account. Otherwise it can prompt underwriting to ask the source of funds. Hope that helps.