Can I use gift money ($20,000) to help pay for the down payment on an investment property?

Me and 2 of my partners need an extra 20,000 to cover the down payment on an investment property. The house is 200,000. We are looking to take out a 160,000 mortgage. We are short 20,000 and one of our partners direct relatives is willing to help us out and 'gift' us 20,000 towards the DP. Is this allowed? What banks will accept this?

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  • 10 years ago
    Favorite Answer

    Yes you can. The bank will need a signed piece of paper from your partners relatives stating that they will be giving the gift.

    When applying for a house loan, they look at all finances from the past 2-3 years. It is getting stricter because of the economy. The bank is going to wonder how you all of a sudden have $20,000 so I would tell them (unlike what others have said).

    Good luck!

  • 3 years ago

    And there ought to be a paper path for the money you employ for the down charge. Get that money interior the financial company or the lender won't have the skill to settle for it. No, i'm no longer kidding. We call this mattress money and we will not settle for it. that's by using the Patriot Act. The lender has to have the skill to make sure the place the money originated. the main an unexplained deposit could be is the quantity of your paycheck.

  • 10 years ago

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  • 4 years ago

    Gift money is not permitted on investment property.

  • Anonymous
    10 years ago

    Don't tell the lender where you got the money - it's only important that you have it.

    Make sure you have a written agreement with the relative that they will receive an appropriate amount of the revenue.

  • Ryan M
    Lv 7
    10 years ago

    Yes it is allowed, however it is reported to the IRS and you will be subject to gift taxes.

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