Proof of deposit to lenders

[Tracey Williams]

Hi everyone,
I approached a bank few months ago and they insist on 20% down payment for the purchase of a rehab that I was planing to buy & hold. At the time I only had 10%.

The house is back on the market at a lower price. I just talked to a family friend living out of the country and he his wiling to give me 5% as a gift and another 5% as a loan to be paid back when I get the property refinanced. The total 10% will be wire transfer to me from Europe.

During the last loan process with the bank, I had to explain almost every deposit and am wondering how to present this deposit to them.
Please share your experience or advice.
Should I have him write a letter stating the money is from him? Will this be enough?
Thanks
Tracey

[Shaun Weekes]

@Bill Gulley 

Fannie Mae requires a minimum of 15% on SFR investment homes. PMI would absolutely be included but if it saves the customer 5% on a down payment of a home that is undervalued do to work needed to be done I think that's great.

The customer does have 10% of her own funds and I'm not familiar enough with commercial loans to comment but I know you're on top of things so I would trust your judgment.

In conclusion my institution has no overlays so when I quote guides it's directly from Fannie, Freddie, FHA, USDA or VA unless it's my portfolio division.

You keep me on my toes and I like that :)