Fannie Mae Selling Guide B3-4.3-05 — Gifts of Equity

Fannie Mae Selling Guide B3-4.3-05 — Gifts of Equity

B3-4.3-05, Gifts of Equity (10/07/2020) Introduction This topic contains information on gifts of equity, including: Gift of Equity Documentation Requirements 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; can be used to fund all or part of the down payment and closing costs (including prepaid items); and cannot be used towards financial reserves. The acceptable donor and minimum borrower contribution requirements for gifts also apply to gifts of equity. See B3-4.3-04, Personal Gifts. When a gift of equity is provided by an acceptable donor, the donor is not considered to be an interested party and the gift of equity is not subject to Fannie Mae’s interested party contribution requirements (see B3-4.1-02, Interested Party Contributions (IPCs)). Documentation Requirements The following documents must be retained in the loan file: Published May 6, 2026 428 a signed gift letter (see B3-4.3-04, Personal Gifts), and the settlement statement listing the gift of equity. Recent Related Announcements The table below provides references to recently issued Announcements that are related to this topic. Announcements Issue Date Announcement SEL-2020-06 October 07, 2020

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