Down payment and savings

The down payment gift letter: what it must say and what goes with it

The gift letter itself is simple. The paperwork around it is where loans get delayed. Lenders need to see the promise that the money is a gift, where it came from and how it reached you, and each piece has to match the others.

Reviewed November 2026 · Written for Buy Home Tips from the sources listed below

When a parent or other relative helps with a down payment, the lender has two concerns. It needs to know the money is not a loan that adds a payment to your budget, and it needs to know where the money came from. The gift letter answers the first. Bank records answer the second.

What the letter must say

Fannie Mae's Selling Guide requires a gift letter signed by the donor. The letter must:

state the actual dollar amount of the gift, or the maximum amount;
include the donor's statement that no repayment is expected; and
give the donor's name, address, telephone number and relationship to the borrower.

If the gift comes from a trust or an estate set up by an acceptable donor, the letter must be signed by the donor and name the trust or estate account.

Most lenders have their own gift letter form that covers these points. Use it. A homemade letter can work, but a missing line or vague wording means another round of signatures.

The records that go with it

The letter is a promise. The lender also has to verify that the money exists and that it reached you or the closing. Fannie Mae requires the lender to confirm either that enough money is in the donor's account or that it has already moved to you or the closing agent. Acceptable proof includes:

a copy of the donor's check and your deposit slip;
the donor's withdrawal slip and your deposit slip;
a record 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 the gift.

Each record should show the same amount as the letter, or an amount within the maximum it states. Names and account details should match too.

Gifts pooled with a household member's money

Most gifts simply add to your funds. Fannie Mae has an extra rule for one situation: when a gift from an acceptable donor is combined with your own funds to make up the minimum cash down payment the loan requires. In that case the donor must certify that they have lived with you for the past 12 months and will live with you in the new home. You also need records showing the shared address, such as a driver's license, a bill or a bank statement.

Timing

A gift can arrive before you apply, during underwriting or at closing. Each choice changes what the lender needs. Money that arrives early becomes part of your bank statements, so the lender will want to trace the deposit. Money that goes straight to the closing agent needs proof of that transfer and must match the Closing Disclosure. Tell the lender your plan at the start so it can ask for the right records once.

The CFPB's closing guide advises reviewing documents before closing day. Check that the gift appears on the Closing Disclosure and that the cash you need to bring reflects it.

Mistakes that slow things down

Calling it a loan. If the donor expects to be paid back, it is not a gift, and the lender must count the repayment as debt. Be honest with both the donor and the lender.

Splitting and moving the money. Every extra transfer is another document to trace.

Changing the amount. Fannie Mae notes that if the amount received differs from the amount used to underwrite the loan, the file may have to be resubmitted.

Cash. Cash handed over and then deposited is hard to trace. Use checks or electronic transfers.

The bottom line

Use the lender's form and keep every transfer record, and the gift letter will be one of the easiest pages in your file. Agree with the donor on the amount and the method before money moves, and make sure the bank records match the letter.

Gift paperwork, in order

Tell your loan officer about the gift before you apply, with the expected amount.
Use the lender's gift letter form if it has one.
Have the donor fill in the amount, a no-repayment statement, and their name, address, phone and relationship.
Decide whether the money goes to your account or straight to the closing agent.
Keep the donor's withdrawal or transfer record and your deposit record.
Do not move the money between accounts after it arrives.
Tell the lender at once if the amount or the timing changes.

Questions buyers ask

Who can give me a gift for a down payment?

For conventional loans, Fannie Mae accepts gifts from relatives and certain other close relationships it defines, such as a fiancé or domestic partner. FHA, VA and USDA have their own donor rules. Ask your lender who qualifies for your loan.

Does the gift letter need to be notarized?

Fannie Mae's rules require the letter to be signed by the donor. They do not require notarization, but some lenders have their own forms and requirements.

Can the gift go straight to closing?

Yes. Fannie Mae accepts evidence of a transfer from the donor to the closing agent, such as a copy of the donor's check to the closing agent or a settlement statement showing the gift.

What if the gift amount changes?

Tell the lender. Fannie Mae notes that if the amount received differs from the amount used to underwrite the loan, the lender may need to resubmit the loan file.

Sources checked for this page

Checked November 2026. Programs and limits change; confirm with the source before you rely on a figure.