If you have parents or grandparents that want to help you with that important first home purchase and are willing to give you some cash to help out, just remember there are rules on such generosity. ,
1. Home owners still need to come up with at least some of the down payment on their own.A spokesperson with Freddie Mac told Newsday that loans backed by Freddie Mac require that when the loan-to-value is greater than 80 percent, the buyer will need to come up with at least 5 percent of the purchase price from his or her own funds. For Fannie Mae loans, Fannie allows all down payment funds to come as a gift on one-unit principal residences. “The thing that is tricky about this is that few people know whether the loan will get sold to Fannie or Freddie,” the Newsday article notes.
2. You may need to document where the down payment money came from. You probably need a gift letter signed and dated and include the giver’s name, address, and telephone number.
Last year, 27 percent of first-time home buyers received a financial gift from relatives or friends that they applied toward a down payment on a new home — up from 22 percent in 2009, according to data from the National Association of REALTORS®.