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Do I have to get an FHA loan if my parents give me down payment?

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A loan officer told me that I have to use an FHA loan because I’m not using my money for a down payment. Is this true? Can anyone help?

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2 Responses to 'Do I have to get an FHA loan if my parents give me down payment?'

Lineas121212 - February 21st, 2010 at 12:51 am
Standard conventional loan guidelines are that if you are using a conventional loan you must make a minimum down payment of 5% from your own funds, in addition to any gift. The exception to this is if th gift is 20% or more of the sales price.

So, if your down payment is coming only from your parents gift, then you probably will have to use an FHA loan.
Expert Realtor - February 23rd, 2010 at 10:25 am
Which is it?

Your question states you are using the money for a down payment from your parents and then you say you are not using it for a down payment.

Many loan programs allow for gifts of down payments from a FAMILY member, not just FHA.

Gifts from family are treated differently in all loan programs vs gifts from third, non-related parties.

Rates related to gift funds DO NOT have an effect on the interest rates.

I would recommend finding an experienced loan officer that is familiar with these programs.

PS: It may help to know that loan officers make more money on gov’t loans…which is why some of them push you into one when you can qualify for a better option.

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