We follow the HUD 4000.1 Guidance on Family Members.Click here for the full guide.
Gifts from Cousins
We also will accept gifts funds from cousins, based on guidance from HUD, under the following circumstances:
- The donor cousin must provide a signed letter of explanation that explicitly states the familial relationship between the borrower and the cousin.
- Stating: “Joe Smith is my cousin.” is not an acceptable explanation.
- An example of an acceptable explanation would be: “Joe Smith is my cousin. His mother, Jane Smith, and my mother, Josie Smith, are sisters. Joe Smith is Jane Smith’s son, which makes him my first cousin.”
- The donor cousin must be a first cousin only. Second cousins and beyond will not be accepted.
- The letter of explanation must come from the donor, not the borrower.
- All other HUD requirements for donor gift funds outlined in the 4000.1 must be met, including obtaining obtaining donor bank statements.
Gifts from In-Laws
Gift funds from in-laws (son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law of the borrower) will be accepted so long as the in-law relationship is current gift funds from future in-laws (marriage pending) or past in-laws (post-divorce) will not be accepted.
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