Some friends work hard to save money, just to own a home of their own. But with rising housing prices and living costs, the pace of saving money can’t keep up with the increase in housing prices, and they start to feel that they will never be able to buy a house!
Don’t lose hope! Actually, if we are buying a primary home or a vacation home, it is possible to accept gift money. If your own savings aren’t enough for the down payment, but your parents, spouse, or relatives are willing to give you some gift money, it can be used for the down payment.
If you’re buying a 1-unit primary home, the entire down payment can come from gift money. If you’re buying a 2-4 unit primary home or a vacation home, at least 5% of the down payment must be your own money, while the rest can be gift money.
However, if you’re buying an investment property, all of the down payment must come from your own funds! Even funds under your spouse’s name cannot be used, unless your spouse is also a borrower.