Final answer:
The lender usually does not allow the source of a borrower's down payment to be illicit because they need assurance that it comes from a legal source to avoid risks like money laundering.
Step-by-step explanation:
When securing a loan, lenders are vigilant in assessing the risk associated with lending money. One particular area of concern is the source of a borrower's down payment. The correct answer to the question is (A) Illicit. Lenders typically require borrowers to disclose the sources of their income, including the down payment, to ensure it comes from a legitimate and legal source. They do not only perform rigorous credit checks, but may also require additional safeguards like cosigners or collateral. Illegitimate sources of down payment can be a red flag for money laundering or other financial crimes, giving lenders a valid reason to reject the loan application or take legal action.