Non-FHA mortgage/downpayment requirements? (PMI, loan, loan, bank accounts)

[JanuaryGirl]

I have questions regarding the requirements for non-FHA mortgage down payments (in the state of NC if that matters at all).

A bit of background... our current house is on an FHA mortgage. We are putting this house on the market so we can buy a new house. We have been pre-qualified to carry both mortgages simultaneously (since who knows how long current house will sit on market), and can easily afford both payments each month. However, since the houses are in the same state we can't have two FHA loans at the same time.

We plan to put 10% down on the new house, and were just informed that, since it's non-FHA, 5% of the value (so half our down payment) must be "our own" money. We have a relative that was going to gift us the whole down payment amount, but clearly that is now out of the question.

So my questions are...
1. What documentation is used to establish that the money is "non-gifted"?
2. We have a fair amount of cash, some bonds, and some gold coins we were thinking of selling anyways.... can this be used or not since it hasn't been sitting in our bank accounts?
3. We also have a seldom-used old car that we wouldn't mind unloading, would the resulting cash be considered our own cash?

The mortgage consultant basically just said it can't be "gifted" money, in which case all of what I mentioned above seems fine, but I'm wondering in the case of cash-on-hand or sold gold/car/bonds if it's going to be a huge pain trying to document everything.

Any info, or a pointer towards any official description of the regulation would be very helpful! Also... is there any downside to a non-FHA loan that we should be aware of with regards to rates or anything else?

Thank you in advance!

[VictorBurek]

1. the lender will ask for 2 months of bank statements...any deposits during those 2 months will be sourced and seasoned, meaning they will ask where the money came from. Also, you will be asked if any of the down payment money is a gift.
2. if selling gold, make sure you document the transaction..showing where it came from, what it was sold for and where the money went. But money under the mattress is not good, and if you deposit and say that you had cash on hand, the lender will not consider that money toward the downpayment.
3. yes, just make sure you document the transaction.

[mirfan]

I am in the situation. I am buying a house where my dad is helping me with 5% down payments. First I heard FHA is the only option since conventional would require 5% of your own funds. I was ok with FHA but mortgage insurance is pretty high on FHA compare to conv loans. Anyways I did some research I found Freddie Mac Alt 97 program which allows 100% gift or borrowed money. My broker confirmed with the underwriter and he said it should work. You can check the guidelines on Freddie website or ask your broker. Message me if you have any other questions. Good Luck

[SmartMoney]

Actually, Fannie Mae no longer requires you have 5% of your own money, it can all be a gift. Your best bet is a combo mortgage, 80/15/5 or 80/10/10 - that's an 80% first mortgage a 10% (or 15%) second and 10% (or 5%) down. This eliminates the need for mortgage insurance, which isn't fully deductible once you cross the 100K Adjusted Gross Income threshold.

[mirfan]

SmartMoney, which Fannie Mae program allows 5% gift money? Who is still offering 80/15/5? Thanks

[JanuaryGirl]

Thanks for the responses! We actually ended up realizing we can do a VA loan which greatly reduces the downpayment requirements & PMI, so no need to scramble after all.