For a Fannie Mae principal-residence loan, a borrower receives a genuine $19,000 gift from a cousin related by blood who is not an interested party to the sale. Is the cousin an acceptable donor solely with respect to the relationship requirement?
Correct Answer
A) Yes: a relative related by blood qualifies, subject to gift documentation and other applicable requirements
A. A cousin related by blood satisfies the donor-relationship requirement. Fannie Mae's relative definition extends beyond parents and spouses to other blood relatives. The $19,000 amount does not change that relationship classification, and the question assumes a genuine gift. Scope and exceptions: Relationship eligibility is not final funds approval. Verify the gift letter, no-repayment statement, availability and transfer, applicable borrower contribution and prohibited affiliations. This principal-residence example does not establish that gifts are permitted for investment properties or under every loan program. Source: Acceptable Donors; Documentation Requirements; Verifying Donor Availability and Transfer — https://selling-guide.fanniemae.com/sel/b3-4.3-04/personal-gifts
Why This Is the Correct Answer
A. A cousin related by blood satisfies the donor-relationship requirement. Fannie Mae's relative definition extends beyond parents and spouses to other blood relatives. The $19,000 amount does not change that relationship classification, and the question assumes a genuine gift. Scope and exceptions: Relationship eligibility is not final funds approval. Verify the gift letter, no-repayment statement, availability and transfer, applicable borrower contribution and prohibited affiliations. This principal-residence example does not establish that gifts are permitted for investment properties or under every loan program.
Why the Other Options Are Wrong
Option B: Only if the gift is repaid after closing
Required repayment would contradict the stated gift treatment.
Option C: No: only parents and spouses can qualify as relatives
It incorrectly narrows the relative definition.
Option D: Only if the cousin becomes a co-borrower
An acceptable donor need not become a co-borrower solely to provide the gift.
Exam Tip
Separate who may give funds from how those funds must be documented.
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