Down payment and savings
Gift funds for a down payment: who can give and how to document it
A relative's gift can cover the whole down payment on many loans, yet gifts are one of the most common reasons a file stalls. The money is rarely the problem. The paperwork and the timing usually are.
Reviewed November 2026 · Written for Buy Home Tips from the sources listed below
A gift is money given to you with no expectation of repayment. Loan programs allow gifts for a down payment because they do not add a monthly debt. Lenders still check that the money is truly a gift, that it came from an acceptable person and that it actually reached you or the closing agent. This guide uses Fannie Mae's Selling Guide as the example; FHA, VA and USDA loans have their own gift rules, and your lender will tell you which apply.
Who can give
Fannie Mae accepts gifts from:
- Relatives: your spouse, child or other dependent, or anyone related to you by blood, marriage, adoption or legal guardianship.
- Non-relatives with a familial relationship: a domestic partner or a relative of that partner, a person engaged to marry you, a former relative, or someone with a long-standing familial-like or mentorship relationship.
The donor cannot be, or be affiliated with, the builder, the developer, the real estate agent or any other interested party in the sale. Gifts are not allowed on investment properties.
How much of your own money is required
For a one-unit principal residence, Fannie Mae requires no minimum contribution from your own funds at any loan-to-value ratio. For two- to four-unit principal residences and second homes above 80 percent loan-to-value, you must contribute 5 percent from your own funds before gifts can cover the rest. HomeReady loans have their own rules, set out in a separate section of the guide.
Gifts can pay for the down payment, closing costs and reserves, though a gift of equity cannot count as reserves.
The gift letter
Fannie Mae requires a letter signed by the donor that:
- States the actual or maximum dollar amount of the gift
- Says that no repayment is expected
- Gives the donor's name, address, telephone number and relationship to you
Your lender will usually provide a form. Fill it in exactly, and make sure the amount matches what is actually transferred.
Moving the money
The lender must verify that the gift is either in the donor's account or has been transferred to you or the closing agent. Fannie Mae lists acceptable proof such as:
- A copy of the donor's check and your deposit slip
- The donor's withdrawal slip and your deposit slip
- Evidence of an electronic transfer from the donor's account to yours or to the closing agent
- A copy of the donor's check to the closing agent, or a settlement statement showing it was received
If the gift goes straight to closing, it must arrive as an electronic transfer, a certified check, a cashier's check or another official check. Cash handed over in person is the hardest to document. Avoid it.
Gift or loan?
If anyone expects to be paid back, it is not a gift. A family loan is a debt that may have to be counted in your debt-to-income ratio. Signing a gift letter for money you will repay misstates your finances on a mortgage application. Be clear with your family before anyone signs.
Timing tips
Bring the gift in early enough that it appears on your statements in an orderly way, or arrange for it to go directly to closing. Either way, tell your lender before the money moves, and keep every confirmation. A late surprise deposit can mean a new round of documentation requests a week before closing.
Mini calculator: months to your cash goal
Add the down payment, closing costs and a cushion, then see how long your monthly saving takes to get there.
This ignores interest, so a savings account that pays interest gets you there slightly sooner.
Gift paperwork, in order
- Tell your loan officer about the gift before you apply.
- Confirm the donor is acceptable under your loan program.
- Get a gift letter signed by the donor with the amount and no-repayment statement.
- Choose how the money will move and keep the proof.
- Avoid depositing gift money in cash.
- Keep the gift separate from any loan the donor might also offer.
Questions buyers ask
Can a gift cover my entire down payment?
Often yes. Under Fannie Mae's Selling Guide, a one-unit principal residence needs no minimum contribution from your own funds, so all funds needed can come from a gift. Two- to four-unit homes and second homes above 80 percent loan-to-value need 5 percent from your own funds. Other programs set their own rules.
Who can give me money for a down payment?
Fannie Mae accepts relatives by blood, marriage, adoption or legal guardianship, and non-relatives with a familial relationship such as a domestic partner, a fiancé or fiancée, a former relative, or someone with a long-standing familial-like or mentorship relationship. The donor cannot be tied to the builder, developer, real estate agent or another interested party.
What does a gift letter need to say?
Fannie Mae requires the letter to state the actual or maximum dollar amount, the donor's statement that no repayment is expected, and the donor's name, address, telephone number and relationship to the borrower.
Does the giver owe gift tax?
The tax rules apply to the giver, not to the lender's review. A large gift may mean the donor has a federal gift tax return to file. The donor should check current IRS guidance for the year of the gift.
Sources checked for this page
- Fannie Mae Selling Guide B3-4.3-04: personal gifts
- Fannie Mae Selling Guide B3-4.3-06: grants and lender contributions
- CFPB: what kind of down payment do I need
Checked November 2026. Programs and limits change; confirm with the source before you rely on a figure.