Does HUD allow gifts of equity?

Only Family Members may provide equity credit as a gift on property being sold to other Family Members.  The Mortgagee must obtain a gift letter signed and dated by the donor and Borrower that includes the following:  
• the donor’s name, address, telephone number; 
• the donor’s relationship to the Borrower; 
• the dollar amount of the gift; and
• a statement that no repayment is required.   

For additional information see Handbook 4000.1 II.A.4.d.iii(F)(4) or II.A.5.c.iii(F)(4) available at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh  

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.


Topic Number: KA-04287