Q: Can this program be used on any loan product?
A: Loan guidelines must allow a gift from a seller-contributed non-profit charity. All FHA loan products and some conventional, VA, and sub-prime products allow for this type of charitable contribution.
Q: Doesn't this program simply mean the price of a home is raised to cover the funds?
A: No. The market value of the home is substantiated by an independent appraiser. The appraiser must substantiate the value of the home based on sales of comparable properties. The price of a home cannot be higher than its appraised value.
Q: Is the seller paying for the buyer's down payment?
A: No. The gift comes from an existing pool of funds operated by the charity. After closing, the seller pays a service fee that replenishes the funds for the next buyer.
Q: Are there any income limitations for potential homebuyers?
A: If a buyer is approved for a loan, he or she can receive the gift funds.
Q: Is the AFF gift tax deductible to the seller?
A. No. IRS Tax Regulations state that if a person receives something of value in return for a contribution to anon-profit, the gift is not tax deductible. In the case of this contribution to the Dove Foundation, the seller has received compensation from the sale of their home. Please refer questions regarding tax consequences of the sale of property to the sellers' tax professional. Additional information can be found here.
Q: Who completes the gift application?
A: The loan officer or real estate agent completes the application and submits it to AFF. Once AFF receives the application, a confirmation gift letter is returned to the mortgage company. This confirmation affirms that AFF has received the request for funds and that the money will be at closing.
Q: How do we know if our wholesale lender has approved the use of AFF?
A: The AFF Downpayment Gift Program is approved by almost every major lender. If a lender has not yet approved the AFF/Dove Foundations program, simply request a compliance package. AFF will forward it to your preferred lender and follow up to be sure this step is taken care of.
Q: Does a buyer have to repay the funds received through the AFF Downpayment Gift Program?
A: No. The buyer does not have to repay the gift.
Q: Can funds from the program be used to purchase condos, townhomes, duplexes, etc.?
A: Yes. If allowed by the lender's guidelines, AFF Gift Funds can be used to purchase owner-occupied properties, including single family homes, manufactured homes and multi-family units.
Contact Miranda Pate, National Sales Advisor, for more information about our program, by calling 251-344-1084 x100.