After people ask about the minimum down payment for our rent to own programs, a followup question is often asked about whether borrowed or gifted funds can be used for down payment.
The answer to this question is yes. The down payment is designed to ensure clients are committed to the program so we aim to make it as convenient as possible for them to get into a home of their own. Even with a borrowed or gifted down payment, investors still feel comfortable knowing there is some real skin the game.
Gifted down payments are fine, but one thing to note with borrowed down payments is that the minimum payments on the borrowed funds must be included when calculating the client’s total debt service (TDS) ratio.