FHA’s Bridal Registry program helps couples save for a new home

December 6, 2011 – What’s the perfect gift to give to newlyweds?

Instead of the usual toaster or crystal bowl, why not help them buy their first home?

The most common reason couples have trouble buying their first home is because they don’t have enough saved for the down payment and closing costs. The traditional down payment is 5 to 20 percent of the loan amount, and when you add in closing costs, the bill can skyrocket. If you’re just starting out, it can seem overwhelming.

That’s where FHA’s Bridal Registry program can help.

The idea of engaged couples registering for gifts is not new. Lots of couples register at department stores and specialty shops after they announce their engagement. So instead of running the risk of getting another toaster, FHA has made it possible for couples to register for monetary gifts that can be used toward the down payment and closing costs.

How does it work?

The couple may open a savings account at any state or federally supervised financial institution. The opened account must be a true savings account. A checking account or money market account is usually not acceptable.

Many lenders offer gift cards that can be used for the couple to send to family and friends. Ideally, gift cards should be mailed with wedding and shower invitations, or however any other bridal registry notice is distributed. When monetary gifts are received, the couple simply deposits them into the Bridal Registry account.

When they’re ready to buy a home, they simply provide the deposit information to the lender as part of their loan application. The underwriter will identify the amount as a gift contribution and consider then an acceptable source of funds.

What if they decide not to buy a home?

The program was created to help those who wish to save for a home, but the couple is never under any obligation to do so or to use the lender they received gift cards from when they are ready to buy. And the accumulated funds in the account belong to them.

Ask your lender for details. 

Some lenders even add their own incentives to help couples using the bridal registry program. Ask your lender for more details about their incentives and FHA’s Bridal Registry program.

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