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Show Me the Money –

O.K. Sources of Funds

When you ask your clients about where they plan to get their down payment and closing costs from,

do you know what’s an OKAY source—and what’s NOT?

Acceptable

• Deposit Accounts, Vested Retirement Accounts, Stocks, Bonds, Trust funds
• Gifts (minimum investment requirements)
• Sale of Asset (Home, car, boat – proof required)
• Secured Loans: Vehicle, 401k, Home Equity
• Business Assets: Accounts (with Accountant Letter) or sale of assets
• Rent-to-Own: Credit toward downpayment cannot exceed the difference between Market Rent and the Actual Rent paid for the last 12 months.
• Seller Contributions: 2%, 3%, 6%, or 9% depending upon LTV & Occupancy
• Down Payment Assistance: Grant Funds or Community Loans

Unacceptable

• Undisclosed Interested Party Contributions
• Payment Abatements
• Sweat Equity – This is complicated – sometimes yes & sometimes no
• Funds that have not been vested
• Personal Unsecured Loans