In mortgage lending, who is referred to as a donor?

In the context of mortgage lending, a donor is specifically defined as an individual who provides gift funds to help a homebuyer with their down payment or closing costs. This contribution is often utilized by first-time homebuyers or those who may have difficulty saving for these upfront expenses. The role of the donor is crucial because many loan programs allow gift funds to count towards the borrower’s equity or funds required to close. Since these funds are typically given without any expectation of repayment, they serve as a significant assistance mechanism for eligible homebuyers.

The other options do not align with the definition of a donor in this specific context. Lenders typically refer to financial institutions or individuals that provide loans, which does not include the act of giving funds as a gift. Realtors earn commissions through property sales and do not give money toward purchases in the capacity of helping with down payments. Government officials may be involved in housing programs that assist borrowers but do not make direct gifts of money to individuals purchasing homes. Therefore, the choice correctly identifying the role of a donor is the individual who makes gifts of money for home purchases.