# gift of equity calculator

A gift of equity is a little known option which allows equity in a family member’s house to be used as the buyer’s down payment. A gift of equity is a little known option which allows equity in a family member’s house to be used as the buyer’s down payment.

Gifts of Equity and Interested Party Contributions. If the requirements listed in this topic are met, the gift of equity is not subject to Fannie Mae’s interested party contribution requirements (see B3-4.1-02, Interested Party Contributions (IPCs)).

The FHA allows borrowers to receive equity from the seller in the form of a gift to buy a home. The seller must be related by blood, marriage or law, or demonstrate a long-standing, family-type.

Looking to see if someone can better explain this for me, say a home purchase price is 150k and 30k is needed for down payment, relative seller agrees to a gift of equity of 30k, so the lender approves the buyer for 180k. I’m having a hard time figuring this out, would the loan be for 150k with 120k owed?

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Gift of Equity A "gift of equity" refers to a gift provided by the seller of a property to the buyer. The gift represents a portion of the seller’s equity in the property, and is transferred to the buyer as a credit in the transaction. A gift of equity is permitted for principal residence and second home purchase transactions.

You can get a rough estimate of your available equity by subtracting all the debts secured by your home (i.e., your mortgage and any other equity loans) from your home’s estimated market value.For example, if the market value of your home is \$300,000 and you owe \$100,000, you have \$200,000 in home equity.

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Most lenders will allow an equity gift to be used toward a down payment. In other words, if a lender requires 20% down in order to avoid mortgage insurance and the gifted equity is 15% of the.