100% gift funds on a conventional loan with MI

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gift fundsThis Weeks Underwriting Tip –  “Did you know…?”

100% gift funds allowed on Conforming Conventional Loans with MI: LTV’s > 80%!

Did you know…. When the DU findings allow – the borrower does not have to contribute any funds to the transaction on Conventional loans with LTV’s > 80% using gift funds.   This is a Fannie guideline that has been around for several years, however until recently we had no MI companies that would allow.   Recently MGIC updated their guidelines and will now accept loans with all gift on LTV’s > 80% with a DU approval.

Requirements are:

  • Must have a DU approval that allows all funds to be from a gift with no minimum borrower contribution
  • Conforming loans only – not eligible for Conforming High Balance
  • 1 unit  principal residence
  • Must be on a Fannie Retained Program
  • MI must be through MGIC