Financing · Fannie Mae B3-4.2-02Large deposits in mortgage underwriting: the 50% rule and how to document them

Lenders read the buyer's last two months of bank statements, and any single deposit larger than 50% of the borrower's total monthly qualifying income is a "large deposit" (Fannie Mae B3-4.2-02). On a purchase, if money from a large deposit is needed for the down payment, closing costs or reserves, the lender must document that it came from an acceptable source – for example a written explanation, proof that an asset was sold, or a wedding invitation supporting gift money. If it cannot be sourced, the lender reduces the verified funds by the unsourced amount and checks that what remains is enough. Only the unsourced part of a deposit counts toward the 50% test. On refinances, large deposits do not need documentation, though borrowed funds still count.