What are the down payment rules in Oklahoma? Can I use a gift of money? Do I have to repay a down payment gift?

In today’s competitive real estate market, many prospective homebuyers in Oklahoma are exploring any option that can help them purchase a home. One such option is receiving a gift of money to use as a down payment on a home purchase. While this can be a game-changer, it’s crucial to understand the rules and regulations governing down payment gifts in the state of Oklahoma.

What is a down payment gift?

A down payment gift is a type of financial gift from one party to another, usually to a family member or close friend, which is used to help cover a down payment and closing costs in the purchase of a home.

How do down payment gifts work?

To use the gift money, the gift recipient must follow the specific rules outlined by their mortgage lender and other parties involved in the creation of the loan, which could include a government agency such as the Fannie Mae and Freddie Mac, FHA, etc. Most VA loans do not require a down payment, but may accept it if the borrower wishes to pay down their rate or reduce their overall loan amount.

Because your lender may have unique requirements, you should inform your lender that you intend to use a down payment gift as part of your purchase. The mortgage lender will likely need to know the amount of the gift, the source of the gift, and your relationship to the giver. Gifts from family members, such as parents, children, siblings, grandparents, domestic partners, etc. are typically acceptable.

What is an equity gift?

The term “equity gift” is another way of referring to a down payment gift. However, some real estate ownership disputes can require the parties to discuss the amount of equity that each party controls, which can be represented in a percentage or dollar amount.

How do I document a down payment gift or equity gift?

Down payment gift recipients should document the gift details in a gift letter. A gift letter will need to have the basic gift information, as well as a written statement that the funds are a gift and do not need to be repaid. Most lenders will be able to provide a standard gift letter for you to use.

Are there down payment gift limits?

No, most lenders do not have a limit on the amount of down payment gift that a homebuyer can receive and use towards their purchase.

If I loaned money to a friend or family member for their down payment, can I be repaid?

This is one of the most frequently asked questions for the giver of a down payment gift. Down payment gifts and equity gifts cannot be repaid to the gift giver unless extreme circumstances exist, such as fraud.

How can a real estate attorney help with my down payment gift?

The attorneys of Avenue Legal Group help clients navigate complex real estate matters, including properly documenting down payment gifts, privately-funded or seller-financed loans.

Contact us to receive the guidance you need to make informed decisions about real estate transactions and disputes.



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