Breaking News! HUD Updated Gift Fund Guidelines to Add Increasing Flexibility on FHA Loans

Blog posted On June 05, 2024

The Department of Housing and Urban Development (HUD) recently updated its guidebook that spans over 1,800 pages. One of the updates brought welcome news for borrowers using an FHA Loan. With the new requirements, borrowers have additional flexibility surrounding any gift funds they might receive.


What are gift funds?

Gift funds are monetary gifts from friends or family that the borrower typically uses for things like a down payment. Previously, the FHA had strict rules on giving and receiving these gifts.


Key updates: 

  • SIMPLIFIED DOCUMENTATION: More options for proving gift donations.
  • INCREASED FLEXIBILITY: Easier to get financial support from loved ones.


The details:

Verification of gift funds can now be done without a donor’s bank statement. Now, any of the following can be used in the verification process:

  • Copy of the donor’s canceled check and evidence of deposit into borrower’s account
  • Copy of the donor’s withdrawal receipt and proof of deposit to the borrower’s account
  • Evidence of the electronic transfer of funds from the donor’s account to the borrower’s account


Who can give?

Here is a list of eligible gift sources for borrowers using an FHA Loan:

  • Family members
  • Borrower’s employer or labor union
  • A close friend with clearly defined and documented interest in the borrower
  • A charitable organization
  • Government agency providing DPA


The new updates have simplified the process by providing borrowers and their gift sources more options for documentation. In general, the changes can help make homeownership more accessible. If you want to learn more about the updates or about how you can raise money for your down payment, let us know!


Sources: HUD