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Just Approved Chris Bartlett Banker helps document a gift so divorced father can buy home

August 25, 2018

Mortgage lender: Chris Bartlett

Purchase process: $305,000

Loan amount: $294,325

Loan terms: 30-year fixed FHA mortgage

Backstory: A recently divorced father in the process of purchasing a multi-family home using a Federal Housing Administration mortgage had been working with a large mortgage lender and had been approved for the mortgage.

The appraisal had been completed and his attorney was in the process of obtaining the title and scheduling the closing. It was at this time he was asked to provide more information on the relationship between him and the person who had provided him a $7,000 gift, money he needed to help cover closing and the remainder of his down payment.

The gift letter referenced the relationship between the two as brothers, but their last names were different, so the lender requested proof. FHA requires a person providing a gift be a family member and has clearly defined guidelines for who can be considered family.

When the father revealed the person was not truly a relative, the lender notified him the money he received could not be used for the purchase and he would need to obtain another $7,000 from an acceptable source.

When the father notified them that there was no other way for him to come up with $7,000, he was informed he would not be able to move forward.

As a last resort, he contacted Bartlett to see if he could assist. They only had five days to close before the contract would expire and because the seller had back up offers, there would not be an extension.

During the initial meeting Bartlett asked detailed questions about the relationship between the gift-giver and the father. There is one exception to the family relationship guidelines allowing a close friend with “clearly defined and documented interest” in the borrower’s life, to be considered an acceptable donor source or gift-giver.

Establishing the relationship is tricky as there are no defined parameters set forth under FHA guidelines.

Bartlett had the father and the gift giver write detailed letters about their relationship. Because the father had grown up in the house with the gift-giver, it was decided we would also have the gift-giver’s mom to write a letter about her relationship with the father and why she considers him her son.

Finally, Bartlett requested pictures from their social media account together. While they gathered the information, Bartlett obtained the entire loan package from the previous lender.

Bartlett submitted the father’s application with all the new information.

The father’s loan was approved using the $7,000 gift because the information provided demonstrated the gift-giver had a clearly defined interest in the father’s life.

Chris Bartlett,

E Mortgage Financial,

(203) 733-4318,

cbartlett@emmloans.com

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