One of the best gifts you can provide to someone you love is a home of their own. Despite the name, the FHA Bridal Registry allows family members to help their loved ones with purchasing their first home even if there are no plans for a wedding. Any celebratory occasion where gifts are normally given is eligible to be a part of this program. This little known Housing and Urban Development (HUD) program was created specifically for families and friends that want to help couples, graduates, expecting parents, or celebratory occasion make a down payment on their FHA mortgage.
Since October 2, 1996, the federal government has been assisting families with their first home purchases. While there are many programs available to assist home buyers, the FHA Bridal Registry is the only one that allows family and friends to make monetary donations towards the down payment of the recipient’s home. With the lowered property values in the current market, newlyweds, expectant couples, or graduates would benefit more from several gifts of $100 than 100 gifted items like various household goods. The majority of gift items that the recipient could acquire would have to be stored away until the recipient could pull together enough for the down payment on their own to move from their apartment.
The FHA Bridal Registry was designed to be more convenient than a traditional bridal or baby shower registry. The couple or graduate simply visits the local FHA mortgage lender of their choice, the same way you would visit a department store registry, and requests to set up a custodial savings account that is dedicated toward funding the down payment of their future home. After they have registered with their FHA mortgage lender, they notify their friends and family. From here, the benefactors are able to either deposit money directly into the custodial savings account, or they can provide the money directly to the recipient to deposit on their own.
The FHA Bridal Registry Program allows for more flexibility, compared to other gifts that can be applied towards a mortgage. Traditional donations for FHA loans require that any gifted funds from friends and family be documented. This documentation process requires that you provide the relationship between the family member and the person receiving the gift, document where the person gifting originally received the funds from, and provide letters from the benefactor stating that funds are intended as a gift and not a loan.
With the FHA Bridal Registry Program, it doesn’t make sense for the borrower to document each of the potentially hundreds of different small cash gifts. With this program the benefactor will not have to provide more than a lender and borrower certification of funds.
While it is preferred, couples or individuals are not required to apply the gifted funds from the Bridal Registry Account towards a down payment on a home. Should the situation for the couple or graduate change then the money can simply be removed from the account to be used elsewhere.