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Announcement 2020-051 - Conforming Freddie Mac Updates - Gift Funds

Effective immediately, Freddie Mac has updated their guidelines when gift funds are used.

When gift funds are used the borrower must provide either:

  • Evidence of transfer of funds from the donor’s account in a financial institution to the borrower’s account. For example, copies of bank statements from both the donor and the borrower’s accounts, or a copy of a canceled gift check or a copy of the donor’s withdrawal slip and the borrower’s deposit slip, or
  • Evidence of transfer of funds from the donor’s account in a financial institution to the settlement or closing agent. For example, a copy of cashier’s check or wire transfer confirmation.

Funds transferred using a third-party money transfer application or service are acceptable only when the documentation included in the mortgage file shows that the funds were transferred, using the application or service (e.g., Zelle), directly from the donor ‘s bank account to the borrower’s bank account or to the settlement or closing agent.

Gift of equity must be reflected on the Settlement/Closing Disclosure Statement.