Gift Of Equity Contract Example For Selling A House In Fairfax
Description
Form popularity
FAQ
A “gift of equity” refers to a gift provided by the seller of a property to the buyer. The gift represents a portion of the seller's equity in the property, and is transferred to the buyer as a credit in the transaction.
If your parents sell you their home for $100,000 and it's worth $300,000, their gift of equity equals $200,000, the difference between what they're selling the home for and how much it is actually worth. A gift of equity is valuable.
Gifted equity requirements The letter should be signed by the buyer and the seller. Funds must also be properly documented through financial records. So, be prepared to provide copies of your recent bank statements, your donor's recent bank statements, and copies of cashier's checks.
Who can give a gift of equity? Generally, you can give a gift of equity to someone if you're a family member (which includes legal guardians), engaged to the recipient or a domestic partner. Loans backed by the federal government may restrict giving gifts of equity to family members only.
Eligibility of Gift Donors for VA Loans ing to the VA Lenders Handbook, Chapter 4, 4-d, an eligible gift donor is defined as any individual who does not have an affiliation with the builder, developer, real estate agent, or any other interested party to the transaction.
Several mortgage programs accept gifts of equity: Conventional Loans: Allowed for primary residences and second homes. FHA Loans: Permitted, but the seller must be a family member or close relative. VA Loans: Allowed, but the full amount of equity must be gifted.
Non-Family Members – In some cases, individuals with a close personal relationship may also be able to gift equity. This can include close friends or individuals with a significant personal connection.