FHA mortgage, gift letter and paying the gift back?

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I have applied for an FHA mortgage; the lender just called me to ask if I ommitted any accounts on the application because I don't have any reserves. The only reserve I would have had - the ability to borrow from the vested bal of my 401K plan - is going to be gone because I need to borrow the down payment and a portion of the closing costs from it.

If I had a relative give me a gift of the down payment, and then sign a gift letter - I am completely prohibited from ever paying that person back? As in I don't take the 401K loan, I get the gift and gift letter, and then I take the 401K loan at some time in the future to repay her???

FHA mortgage, gift letter and paying the gift back?

first of all FHA doesnt require reserves....

they're probably looking for money for the closing costs or down payment.

you can get a gift from your family member....whether you pay her back or not is btwn you and her. if the lender finds out that you have to pay her back then they will disqualify that gift money.

i would have the seller pay the closing costs...as any fha borrower would do...i'm surprised that the lender or the realtor didnt mention this

FHA mortgage, gift letter and paying the gift back?

The gift letter simply specifies that the donor does not require repayment, it does not prohibit you from doing so should your wish.

FHA mortgage, gift letter and paying the gift back?

Reserves refers to money left over in case of emergency. Depending on how much your 401(k) is, you may have enough for both the downpayment & closing costs and the reserves.

A gift isn't expected to be paid back. That would be a loan. I guess you could at some time, give a gift to the person who gifted you.

FHA mortgage, gift letter and paying the gift back?

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