Can I use crypto, cash I keep at home, or money from selling my car for a down payment?

How does crypto work for a down payment?

Fannie Mae's Selling Guide (B3-4.1-04) accepts virtual currency for the down payment, closing costs and reserves when:

• There's documented proof it was exchanged into U.S. dollars.
• The dollars are held in a U.S. or state-regulated financial institution.
• The funds are verified in dollars before closing.

Expect to show statements from your exchange account that trace the sale to the deposit in your bank. Crypto can't be used for the earnest money deposit on your purchase contract. Selling may also have tax effects, so check with a tax professional before you sell.

What about selling a car, boat or other property?

Under B3-4.3-18, money from selling personal property counts as long as the buyer isn't involved in your home purchase or mortgage. The lender will want:

• Proof you owned it, such as the vehicle title.
• A bill of sale or a statement from the buyer.
• Proof you received the money, like a deposit slip or bank statement.
• For larger sales, an independent value estimate. The lender uses the lower of that value and the sale price.

Can I use cash I've saved at home?

On most conventional loans, no. Fannie Mae's B3-4.3-20 says cash on hand isn't an acceptable source for the down payment or closing costs. The exception is HomeReady, for buying a one-unit home, when:

• You usually pay your expenses in cash and the amount saved fits that history.
• The money is in a bank account or acceptable escrow account at application, or at least 30 days before closing.
• You sign a statement on where it came from and that it wasn't borrowed.
• Your credit report shows little or no use of credit or banking.

Cash on hand can't count toward reserves.

FHA is more flexible. HUD's Handbook 4000.1 lets cash saved at home be used if it's deposited in a bank or held by the escrow or title company, and you explain how and over how long you saved it. The lender checks that the amount makes sense given your income, spending, expenses and history of using banks.

How do I make this go smoothly?

Move money into your bank account early and keep records of where every large deposit came from; a letter of explanation may still be needed. Other options are in the down payment sources guide and gift funds guide.