Gift Letter Template for Mortgage Down Payment

A gift letter is a formal document that verifies funds given to a home buyer are indeed a gift and not a loan that requires repayment. This essential document helps mortgage lenders confirm the legitimacy of down payment sources and ensures compliance with lending regulations.

What This Template Is For

This gift letter template is specifically designed for documenting monetary gifts used toward a mortgage down payment. It provides all the necessary information lenders require, including the gift amount, donor relationship, and confirmation that repayment is not expected. The template helps both the gift giver and recipient meet legal requirements and facilitate the mortgage approval process.

When To Use This Template

Use this gift letter template when:

Receiving funds from family members for a home down payment
The gift amount exceeds 50% of your monthly household income
Your lender requests documentation of gifted funds
You need to verify the source of down payment funds
The gift has been received within the past 60 days

How To Customize It

Follow these steps to complete your gift letter:

Enter the donor's full legal name and relationship to the recipient
Specify the exact gift amount and date of transfer
Include the property address if known
Add the donor's contact information and address
Clearly state there is no repayment expectation
Have both parties sign and date the document
Attach relevant bank statements or transfer records

Common Use Cases

Gift letters are commonly used for:

Parents gifting down payment funds to children
Relatives contributing to first-time homebuyers
Wedding gifts designated for home purchase
Graduation gifts meant for property investment
Family assistance with closing costs

Best Practices

Follow these guidelines for a valid gift letter:

Be specific about the gift amount and transfer date
Include all required donor information
Keep copies of all supporting documentation
Submit the letter promptly to your lender
Ensure all signatures are original

Template Variations

Different situations may require specific versions:

FHA loan gift letters
Conventional mortgage gift letters
VA loan gift documentation
Multiple donor gift letters

Success Stories

Many homebuyers have successfully used this template to document gifts from family members, leading to smooth mortgage approvals and successful home purchases. One recent buyer received a $50,000 gift from parents, properly documented it using this template, and closed on their dream home within 30 days.

Frequently Asked Questions

Who can give a gift for a mortgage down payment?

Family members, including parents, siblings, and grandparents, are typically accepted. Some loan types also allow gifts from close friends or charitable organizations.

How much can be gifted for a down payment?

There's no limit to the gift amount, but gifts exceeding $15,000 may require tax reporting by the donor.

Do I need bank statements with the gift letter?

Yes, lenders typically require bank statements showing the transfer of funds.

Can the gift be a loan that's forgiven later?

No, the funds must be a true gift with no expectation of repayment.

How long is a gift letter valid?

Gift letters are typically valid for 60-90 days, depending on the lender.