Non-Borrowing Purchaser

Did you know?

On conforming purchases, you can use sole and separate assets from a non-borrowing purchaser (NBP) and NOT have to treat these assets as a gift. 

When the NBP is on title and the purchase contract, the NBP can provide funds used for closing . The NBP must provide a letter indicating that the funds are their contribution to the transaction and carries no repayment

Example 1:
Wife is purchasing an Investment property solely and separately. 
Assets come from the husband's sole and separate account
Husband is on the purchase contract & title to the new home - the husband's funds may be used to close the transaction and do not count as a gift. 

Example 2:

2 friends are buying a house. Friend 1 has all assets, but can’t be on the loan because of bad credit and friend 2 will be on the loan by themselves. Because of their relationship status and seasoning requirements, these funds aren’t eliglble as a gift, but can be used if friend 1 is qualified as a NBP.

This has been confirmed with FNMA directly and is not available with most lenders. Most lenders have an underwriting “overlay” that mandates any funds like this be used as gift funds. Gift funds are great, but have limitations such as the donor’s relationship status, large deposits, seasoning of funds etc…..