DSCR Gift Funds

Private Lending & Conventional Mortgage Advice
1yFollow

DSCR Gift Funds

Account Closed
Investor · Eau Claire, WI · Member since 2019 · 20 posts · 6 votes

I am planning on purchasing a $350k property with DSCR loan. I seen online gift funds can be used with after 10% of my own money. Does being a first time investor change the amount of my required contribution?

I have $35k of my own money to go towards the purchase. My son will be gifting the remainder to me. Can gift funds be used for reserves? Or will i need to have $35k + reserves of my own money to make this happen?

4Reply
210 views

Most Popular Reply

Mike GrudzienPro Member
Lender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
1y

I'll join in and repeat: "It depends on the lender"

1Reply
See this reply in the discussion

12 Replies

Jump to latestLatest
  • AJ ExnerPro Member
    Lender · Springfield, MO · Member since 2023 · 661 posts · 320 votes
    1y

    It depends on the lender, so giving them a heads up is good.

    Most of the programs that I am aware of will allow you do utilize only 50% of whatever the 'gift' is. So if you provide a good letter of explanation, then you could do more than the 10% as long as it falls within the 50% of the gift funds. 

    Happy to connect and talk through numbers if that would be helpful.

    Good luck!

    [email protected]417-427-2612
    1Reply
  • Account Closed
    OP
    Investor · Eau Claire, WI · Member since 2019 · 20 posts · 6 votes
    1y
    Quote from @AJ Exner:

    It depends on the lender, so giving them a heads up is good.

    Most of the programs that I am aware of will allow you do utilize only 50% of whatever the 'gift' is. So if you provide a good letter of explanation, then you could do more than the 10% as long as it falls within the 50% of the gift funds. 

    Happy to connect and talk through numbers if that would be helpful.

    Good luck!


     Could you explain a little better? I am not sure what your statements mean.

    0Reply
  • AJ ExnerPro Member
    Lender · Springfield, MO · Member since 2023 · 661 posts · 320 votes
    1y
    Quote from @Account Closed:
    Quote from @AJ Exner:

    It depends on the lender, so giving them a heads up is good.

    Most of the programs that I am aware of will allow you do utilize only 50% of whatever the 'gift' is. So if you provide a good letter of explanation, then you could do more than the 10% as long as it falls within the 50% of the gift funds. 

    Happy to connect and talk through numbers if that would be helpful.

    Good luck!


     Could you explain a little better? I am not sure what your statements mean.


    So if you are getting a gift of $100k, then you could use 50k on top of your 35k for the down payment + reserves. 

    [email protected]417-427-2612
    0Reply
  • AJ ExnerPro Member
    Lender · Springfield, MO · Member since 2023 · 661 posts · 320 votes
    1y
    Quote from @Account Closed:
    Quote from @AJ Exner:

    It depends on the lender, so giving them a heads up is good.

    Most of the programs that I am aware of will allow you do utilize only 50% of whatever the 'gift' is. So if you provide a good letter of explanation, then you could do more than the 10% as long as it falls within the 50% of the gift funds. 

    Happy to connect and talk through numbers if that would be helpful.

    Good luck!


     Could you explain a little better? I am not sure what your statements mean.

    There might be a program that could use 100%, but that is how most would do it. 
    [email protected]417-427-2612
    0Reply
  • Derek BrickleyBusiness Member
    Lender · Ann Arbor, MI · Member since 2021 · 689 posts · 236 votes
    1y

    Hey Zenas! 

    Nope doesn't change anything.  Some times you an go 5% borrower contribution, but 10% will open up more avenues for you.  Depending on your deal, reserves may or may not be required to be in your name - although you can use other accounts i.e. 401ks, IRAs, etc. towards that reserve requirement.  Feel free to reach out though if you have questions on how that could work.

    [email protected]734-645-7722
    Gold Star Mortgage Financial Group547 Reviews
    WebsiteView Page
    0Reply
  • Jacob Sherman
    12 Penns Trail Suite 138 Newtown, PA 18940 · Member since 2023 · 1k+ posts · 319 votes
    1y

    Yes will be allowed 

    0Reply
  • Mike GrudzienPro Member
    Lender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
    1y

    I'll join in and repeat: "It depends on the lender"

    1Reply
  • Matt Bridgman
    Member since 2025 · 11 posts · 2 votes
    1y

    There is a way to get creative here, I will DM you

    0Reply
  • Nick BelskyBusiness Member
    Lender · Orlando, FL · Member since 2021 · 1k+ posts · 704 votes
    1y

    @Account Closed

    I am always perplexed when folks get hung up on gift funds for DSCR loans. There are so many nuances around it, why not use a DSCR lender who does not source or season funds to close? The ones I work with are within 25-45bps pricing with all the other lenders I see.

    Cheers!

    [email protected]
    Belsky Mortgage, LLC521 Reviews
    WebsiteView Page
    1Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    1y
    Quote from @Account Closed:

    I am planning on purchasing a $350k property with DSCR loan. I seen online gift funds can be used with after 10% of my own money. Does being a first time investor change the amount of my required contribution?

    I have $35k of my own money to go towards the purchase. My son will be gifting the remainder to me. Can gift funds be used for reserves? Or will i need to have $35k + reserves of my own money to make this happen?


     DEPENDS ON THE LENDER LOL

    There are many that do not have any minimum borrower contribution requirement. You can also just work with a lender that does not season and source deposits and that will pretty much clear up your situation. 

    [email protected]818-269-7983
    LuxePrivate Investments LLC 570 Reviews
    WebsiteView Page
    1Reply
  • David Whitmer
    Member since 2025 · 1 post · 0 votes
    11mo

    So can I make a $1M purchase using $50K of my own funds and getting a gift from the Seller for the 15% down?  Do they actually have to put that down or can that just be their equity?  Why would the Seller have to put $15% down if they were just going to get it back?  I have a lender that says they can do 40 year amortization @ 5.99% up to 80% on a purchase and the owner can contribute 15% down.  

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free