# Question: What due diligence is required for down payments in shared equity mortgages?

> Verifying the down payment source is a key step in mortgage approval to mitigate risk.

Category: Purchasing
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/purchasing/question-what-due-diligence-is-required-for-down-payments-in-shared-equity-mortgages

## Answer
Verifying the down payment source is a key step in mortgage approval to mitigate risk. Lenders must confirm that down payments originate from legitimate sources, not borrowed funds (unless coupled with robust risk mitigation). For example, consider the following scenarios:

## Institutional highlights
- You need to prove your down payment comes from your own bank accounts or savings.
- If someone gifts you money for a down payment, you'll need a letter confirming it's a gift, not a loan.
- Using less common down payment sources might require extra checks from your lender.
- Government rebates or incentives for affordable housing can count towards your down payment.

## Related guide
- https://ratellow.com/guides/shared-equity-fractional

## Sources
- Footnotes — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/capital-adequacy-requirements-car-guideline-2026
- LTV Ratio Frameworks — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#2.4.3
- Disclosure requirements — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#3.1