“I thought FHA allows you to borrow your down payment. Am I wrong?”
Answer:
FHA allows the down payment to be a “Gift” from a family member or from a loan against an asset. In fact the family member can pay for everything and the buyer does not have to have any of his/her own funds.
You may be thinking of some creative ways loan officers have gotten away with borrowing the money. The gift documentation is pretty simple: Gift letter, cashier’s check showing the donor as the remitter, deposit receipt and verification of balance in buyer’s account after the deposit.
