Asset requirement is another aspect of qualifying a borrower for an FHA approved loan. According to FHA underwriting guidelines, the borrower is required to contribute a minimum of 3.5% of the purchase price to the loan. All assets must be fully documented as either having been seasoned for a total of 60 days or they need to come from an eligible, documented source. In order to close and fund the loan you must document adequate assets including all closing costs.

 

When the lender or underwriter looks at the borrower’s bank statements with a 60-day activity history, they will have to explain and document any unusually large deposits. The underwriter will look at asset statements closely to identify, and eliminate if necessary, any unusable asset sources that have been contributing to the balance of the borrower’s account.

 

Gift funds are considered the same as if they were the borrower’s own money in the bank. They can be used to cover any and all closing costs, pre-paid expenses and the required 3% minimum statutory investment. Gift funds may come from a variety of sources including legitimate charities, the borrower’s employers, or relatives. They can also come from non-relative individuals who have a long-standing relationship with the borrower, as long as that individual is not associated with the transaction in any other way.