As a mortgage loan originator at Atlantic Mortgage & Finance Corporation, I’m excited to share an important update for those considering an FHA loan. The Federal Housing Administration (FHA) has announced a significant guideline change that can simplify the homebuying process, especially for those relying on family financial support.
What’s New?
Since the 2008 financial crisis, FHA loans have become a popular option for many homebuyers. However, a persistent challenge has been the documentation required when a family member provides funds for a down payment or closing costs. Traditionally, donors had to provide a bank statement to verify their ability to gift funds, causing frustration and hesitation among many families.
The Good News
Starting this week, donors are no longer required to submit a bank statement. This change aims to ease the process for both donors and homebuyers, making FHA loans more accessible.
How Does This Affect You?
Key Benefits:
- No Bank Statements Needed: Donors no longer need to submit their bank statements, significantly reducing paperwork and hassle.
- Gift Letter Requirement: Donors must still provide a signed gift letter confirming the money is a gift, not a loan.
- Documenting the Transfer: While the bank statement requirement is gone, there are still several ways to document the funds transfer:
- Provide a copy of the donor’s wire transfer or canceled check.
- Show evidence of the donor’s withdrawal and the deposit into the borrower’s account.
- Use a copy of the electronic funds transfer.
Closing Escrow Verification:
If the gift funds are verified at the close of escrow, you only need proof of the electronic funds transfer, a bank-certified check, a cashier’s check, or an official bank check. A bank statement is not required.
Why This Matters
This change is a major step forward in making FHA loans more user-friendly. It aligns FHA guidelines more closely with those of conventional loans, which do not require such detailed donor documentation. This update should ease the burden on families, allowing them to support their loved ones in purchasing a home without unnecessary complications.
Final Thoughts
Buying a home is a significant milestone, and it’s encouraging to see the FHA making moves to simplify this process. If you’re considering an FHA loan and need financial help from your family, this new guideline can make the journey smoother.
Contact Information
Always remember to work with your mortgage professional to ensure all your documentation is in order and that you’re fully aware of all requirements.
Michael Dorosko
Mortgage Loan Originator, Atlantic Mortgage & Finance Corporation
www.michaeldorosko.com
(352) 397-4000
miked@atlanticcorporation.net
With over a two decade of experience helping consumers purchase and refinance primary homes, second homes, and investment properties, I’m here to guide you through every step of the mortgage process.
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