Gifts or donations from entities (grants) are permitted and documented in accordance with B3-4.3-04, Personal Gifts , and B3-4.3-06, Grants and Lender Contributions. The entry of gifts and grants on the loan application is as follows:
- When a gift is entered in Section VI Assets as a gift, the funds are included in available funds. It is important that the gift amount is identified separately as a gift even if the funds have already been deposited in a liquid asset account owned by the borrower (such as a checking or savings account). The balance of the liquid asset account entered in the loan application must be adjusted accordingly to prevent duplicate entry of funds. For example, if the borrower’s verified checking account reflects a balance of $15,000, and $5,000 of that amount was from a gift, the checking account balance should be adjusted to reflect $10,000, and the $5,000 should be entered separately as a gift.
- When a gift is entered in Section II as a source of down payment, the funds are not included in the available funds.
Some loan origination systems (LOS) may not provide a “gift” data entry option, or the gift entry may not map correctly to DU. (For example, the LOS may identify the gift as a checking account when the data is transmitted to DU.) The lender must ensure that gift information has been properly identified in DU.
Form 1003 1/2021
Gifts and grants are entered in Section 4d and identified as being deposited or not deposited. Gifts and grants that are deposited have been received by the borrower and the value should be included in another asset account. The amount of the gift or grant is not included in available funds.
Gifts and grants that are not deposited are not included in another asset account. The amount of the gift is included in available funds.
For gift documentation requirements, see B3-4.3-04, Personal Gifts.
Gifts of Equity
Enter a gift of equity in the loan application.
A gift of equity must meet the gift of equity requirements defined in B3-4.3-05, Gifts of Equity .
For additional information, see B3-4.4-02, Requirements for Certain Assets in DU .