Gift Funds
Gift funds are monetary contributions from an eligible donor — typically a family member — used to help cover a borrower's down payment or closing costs.
Lenders require a signed gift letter confirming the funds are a true gift and not a loan that must be repaid. The donor's bank statements and a paper trail showing the transfer of funds are also typically required during underwriting.
Not all loan programs accept gift funds from the same sources. FHA, VA, and conventional loans each have specific rules about who qualifies as an eligible donor and how much of the down payment can come from gift funds.
Why This Matters: Gift funds can make homeownership possible sooner — but only if they are documented correctly. Improper handling of gift funds is one of the most common causes of underwriting delays. Work with your loan officer to get it right from the start.
Common question
Who can give gift funds for a mortgage?
Eligible donors are usually family members, though program rules vary. FHA, VA, and conventional each have specific rules about who can give and how much of the down payment can be gifted.
What documentation is needed for gift funds?
Lenders typically require a signed gift letter stating the funds are a true gift (not a loan), plus the donor's bank statements and a paper trail showing the transfer of funds.
Related Mortgage Terms
Using gift funds for your down payment? We will tell you exactly what documentation you need to keep your file on track.
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