A gift letter for a mortgage is a short signed statement from the person giving you money confirming that the funds are a gift, not a loan. To satisfy your lender, it needs to name the donor, state the dollar amount, identify the donor’s relationship to you, and declare that no repayment is expected. Everything else in the process, from who’s allowed to give the money to what documents back the letter up, flows from those four elements.
What to Put in the Letter
Fannie Mae’s guidelines set the standard most conventional lenders follow, and they require every gift letter to contain three things: the dollar amount of the gift (or the maximum amount, if the final figure isn’t set yet), a statement from the donor that no repayment is expected, and the donor’s name, address, phone number, and relationship to you.1Fannie Mae. Personal Gifts – Fannie Mae Selling Guide FHA loans require essentially the same elements: the donor’s name, address, and phone number; the relationship to the borrower; the dollar amount; and a statement that no repayment is required.2HUD. Does HUD Allow Gifts of Equity
Include a few more items to head off underwriter questions:
- The exact date the funds were or will be transferred to your account or to the closing agent.
- The property address, if the gift is earmarked for a specific home purchase. This ties the funds to the transaction.
- Signatures from both you and the donor, dated. Lenders expect the donor’s signature at minimum, but having both avoids follow-up requests.
Sample Wording
There’s no legally required format or magic phrasing, but vague language invites underwriter questions. Plain, direct sentences work best. Something like this covers the core declaration:
“I, [donor name], am giving $25,000 to [your name] as a gift toward the purchase of [property address]. The funds were transferred on [date]. No repayment is expected or required. My relationship to the recipient is [relationship]. My address is [address] and my phone number is [phone].”
Signed by the donor, dated, and paired with the supporting documents below, that’s the whole letter.
Who’s Allowed to Give the Gift
Not everyone’s money qualifies as a gift for mortgage purposes, and the rules depend on your loan type. People run into trouble here: they get a generous check from a friend or coworker, write up a gift letter, and then learn the lender won’t accept it.
Conventional Loans
Fannie Mae accepts relatives connected to you by blood, marriage, adoption, or legal guardianship. That covers parents, siblings, grandparents, in-laws, and similar family ties. Non-relatives qualify only if they share what Fannie Mae calls a “familial relationship”: a domestic partner, a fiancé, a former relative, or someone with a long-standing familial or mentorship relationship with you. The donor cannot be the builder, developer, real estate agent, or anyone else with a financial interest in the transaction.1Fannie Mae. Personal Gifts – Fannie Mae Selling Guide
FHA Loans
FHA defines eligible donors as “family members,” but the definition is fairly broad: parents, grandparents, children (including stepchildren), siblings and stepsiblings, spouses, domestic partners, adopted and foster children, aunts, uncles, and in-laws all qualify.2HUD. Does HUD Allow Gifts of Equity Unlike conventional loans, FHA generally does not allow gifts from friends or people outside the family definition.
VA Loans
VA loans cast the widest net. Family members, fiancés, domestic partners, close friends with a documented relationship, employers, charitable organizations, and government housing programs can all provide gift funds. The same restriction on interested parties applies: sellers, lenders, and real estate agents cannot be donors.
Proof the Lender Will Want Beyond the Letter
The gift letter alone isn’t enough. Lenders need proof that the donor actually had the money and that it actually reached your account (or the closing agent). Fannie Mae accepts several forms of evidence:1Fannie Mae. Personal Gifts – Fannie Mae Selling Guide
- Before closing: a copy of the donor’s check and your deposit slip, a copy of the donor’s withdrawal slip and your deposit slip, or evidence of an electronic transfer from the donor’s account to yours.
- At closing: if the funds haven’t been transferred to you beforehand, the donor can provide them directly to the closing agent via electronic transfer, certified check, cashier’s check, or another official check. The settlement statement showing receipt of those funds serves as documentation.
The lender must also verify the donor’s account held enough money to cover the gift. Expect your donor to provide a bank or investment account statement showing the available balance. This catches some families off guard, so tell your donor in advance that they’ll need to share financial records with your lender.
Lenders typically pull your last two months of bank statements when you apply, and any deposit that looks large relative to your normal income will draw scrutiny. If $20,000 shows up in your checking account six weeks before closing, the underwriter will ask where it came from. A gift letter paired with the transfer documentation answers the question before it becomes a problem.
How Much of the Down Payment Can Come From the Gift
A common misconception is that you always need to put up some of your own money alongside a gift. For conventional loans, the answer depends on the property type and how much you’re borrowing relative to the home’s value.
- One-unit primary residence: the entire down payment and closing costs can come from a gift, regardless of your loan-to-value ratio.
- Two-to-four-unit primary residence or second home with an LTV of 80% or less: the full amount can come from gift funds.
- Two-to-four-unit primary residence or second home with an LTV above 80%: you must contribute at least 5% from your own funds. Gift money can cover everything above that.
One useful exception: if an acceptable donor has lived with you for the past 12 months and will continue living in the new home, Fannie Mae treats that person’s gift as your own funds. Their contribution can satisfy the 5% minimum borrower contribution for multi-unit properties.1Fannie Mae. Personal Gifts – Fannie Mae Selling Guide
What the Donor Should Know About Gift Tax
The donor, not the recipient, bears any gift tax responsibility. For 2026, each person can give up to $19,000 per recipient without triggering any tax filing requirement. A married couple can combine their exclusions and give up to $38,000 to a single recipient by electing to “split” gifts on their tax return.3Internal Revenue Service. Frequently Asked Questions on Gift Taxes
If the gift exceeds the annual exclusion, the donor needs to file IRS Form 709 by April 15 of the following year.4Internal Revenue Service. Filing Estate and Gift Tax Returns Filing Form 709 doesn’t necessarily mean owing tax. It reduces the donor’s lifetime exemption, which for 2026 is $15,000,000.5Internal Revenue Service. Whats New – Estate and Gift Tax Most donors will never come close to exhausting that amount, so the practical impact is paperwork.
Submitting the Letter Without Delaying Closing
Have the donor sign the letter before you send it to your lender. Notarization isn’t universally required, but some lenders or title companies request it, and it can prevent disputes about authenticity. Notary fees for a single signature are typically modest, often $10 to $15 depending on your state.
Submit the signed letter along with the supporting transfer documentation. The earlier your lender has this paperwork, the better. Underwriters flag unexplained deposits early in the review, and having the gift letter ready from the start prevents last-minute delays. If you’re on a tight timeline, ask your loan officer exactly what they need before the donor writes the check, so everything arrives together.