HUD has released the rules on dealing with
down payment assistance programs.
MORTGAGEE LETTER 2006 -13
Federal Housing Administration (FHA) approved mortgagees that
seek FHA mortgage insurance on loans secured by single family
houses, on which downpayment assistance has been provided to
the borrower in the form of gifts, are required to determine
that the gifts are from sources acceptable to FHA.
The mortgagee is
responsible for ensuring that an entity is a charitable
organization as defined above. One resource available to
mortgagees for obtaining this information is the Internal
Revenue Service (IRS) Publication 78, Cumulative List of
Organizations described in Section 170(c) of the Internal
Revenue Code of 1986, which contains a list of
organizations eligible to receive tax-deductible charitable
contributions. The IRS has an online version of this list
that can help mortgagees and others conduct a search of these
organizations. The online version can be found at:
using the following instructions to obtain the latest update.