When you’re buying a home with a mortgage, your lender needs to know where every dollar used for the down payment, closing costs, and reserves is coming from. This isn’t optional — it’s a federal requirement, and it applies regardless of loan program. The lender has to document, verify, and approve the source of your funds before your loan can close.

This guide covers what counts as an acceptable source of funds for closing in Washington State, what documentation is typically required, and a few sources that won’t fly with lenders — no matter how legitimate they feel to you. [Read more…]