Welcome to the CHDC Gift Program

  TIN: 88-0394320

4155.1 REV-4 CHG-1

SECTION 3: BORROWER'S CASH INVESTMENT IN THE PROPERTY

2-10FUNDS TO CLOSE. The cash investment in the property must equal the difference between the amount of the insured mortgage, excluding any  upfront MIP, and the total cost to acquire the property, including prepaid expenses, etc. (see paragraph 1-9). All funds for the borrower's investment in the property must be verified. Acceptable sources of these funds include:

A.Earnest money deposit. If the amount of the earnest money deposit exceeds 2 percent of the sales price or appears excessive based on

the borrower's history of accumulating savings, the lender must verify the deposit amount and the source of funds. Satisfactory

documentation includes a copy of the borrower's cancelled check. We will also accept a certification from the deposit holder acknowledging receipt of funds and separate evidence of the source of funds. Evidence of source of funds includes a verification of deposit or bank statement showing that the average balance at the time the deposit was made was sufficient to have included the earnest money deposit.

B.Savings and checking accounts. A verification of deposit (VOD) may be used to verify these accounts, along with the most recent bank statement. If there is a large increase in an account, or the account was opened recently, an explanation and evidence of source of funds must be obtained by the lender.

C.Gift funds. An outright gift of the cash investment is acceptable if the donor is a relative of the borrower, the borrower's employer or labor union, a charitable organization, a governmental agency or public entity that has a program to providehomeownership assistance to low- and moderate-income families or first-time homebuyers, or a close friend with a clearly definedinterest in the borrower. A gift from any other source is considered an inducement to purchase and requires a reduction to the salesprice. No repayment of the gift may be expected or implied. (As a rule, our concern is not with how the donor obtains the gift fundsprovided they are not derived in any manner from a party to the sales transaction. Donors may borrow gift funds from any other acceptable source.)