New policies go into effect May 5, 2020.

Freddie Mac Bulletin 2020-1 addresses the retirement of LIBOR Arms. It also addresses the verification of gift funds. Currently, if the file does not show evidence that gift funds have been deposited in a Borrower’s account then the Borrower must provide evidence of the transfer of funds from the donor to the Borrower. Freddie Mac is updating the Guide to require that in all instances when gift funds are used the Seller must provide either: evidence of transfer of funds from the donor’s account in a financial institution to the Borrower’s account, or evidence of transfer of the funds from the donor’s account in a financial institution to the settlement or closing agent. Funds transferred via a third-party money transfer application or service are acceptable only when the documentation included in the file evidences that the funds were transferred, using the application or service, directly from the donor’s bank account to the Borrower’s bank account or to the settlement or closing agent. This helps to ensure that the donor identified on the gift letter is the individual providing the gift funds. This provision is effective May 5, 2020.

Source: Freddie Mac