Utilize Gift Funds in a DSCR Loan

Feb 20, 2024

We offer non-QM products that allow for gift funds, regardless of your borrower’s income documentation type. Our DSCR loan programs can handle any situation.

DSCR for Investors

When it comes to our DSCR program, gift funds can be utilized for the down payment, closing costs, and reserves. However, it’s important to note that the borrower must first document the minimum required borrower contribution of 10% before applying gift funds. Once the borrower’s funds are documented, gift funds can be applied to enhance the financing process.

  • Gift funds can be used for down payment, closing costs, and reserves.
  • Minimum required borrower contribution of 10% must be documented before applying gift funds.
  • Gift funds are allowed for down payment, closing costs, and reserves.
  • 10% contribution is required for second homes, investment properties, and primary residences with unverifiable housing history.

Non-QM Loan Options

For borrowers seeking to purchase an investment property, gift funds are allowed to be used for the purchase. Similar to the DSCR program, the borrower must document a minimum required borrower contribution. In this case, a 5% contribution of the sales price is necessary, except for specific scenarios where a 10% contribution is required. These scenarios include purchasing a second home, investment properties, or a primary residence with an unverifiable housing history.

Who Can Provide a Gift

Gift funds can be provided by a relative, which includes the borrower’s spouse, child, or other dependent. Additionally, any individual who is related to the borrower by blood, marriage, adoption, or legal guardianship can also provide a gift. We also accept gifts from non-relatives who share a familial relationship with the borrower. This includes domestic partners (or relatives of the domestic partner), individuals engaged to marry the borrower, former relatives, or godparents.

Contact us at any time to go over your real estate investment purchases and how gifts can be used to purchase those properties.

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