FHA funds to close: where the money comes from matters as much as how much you have.
FHA allows many legitimate sources for the borrower's required investment and closing costs, but each source has documentation and eligibility rules.
Funds-to-close knowledge tree
Gift funds & gift of equity
Who can give, documentation, transfer evidence and family gift-of-equity rules.
Seller contributions
The 6% interested-party limit, closing costs, prepaids, points and inducements to purchase.
DPA & secondary financing
Government/nonprofit assistance, subordinate liens and how FHA DPA fits with our 50-state directory.
Assets & reserves
Bank funds, earnest money, retirement, stocks, cash on hand, secured loans and business assets.
Non-occupying co-borrowers
Family/non-family structures, maximum financing and special LTV rules.
Minimum Required Investment
3.5% maximum-financing framework and the difference between MRI and total cash to close.
Official FHA policy baseline
Primary source: HUD/FHA Single Family Housing Policy Handbook 4000.1. HUD identifies it as the consolidated, comprehensive source of FHA Single Family policy; the current update was published August 12, 2026.