Mortgage Answers / Gift Money
The Short Answer
Gift money may be allowed, depending on the loan, donor and documentation. A true gift has no expected repayment. Ask your lender how to document it before moving funds.
Before anyone sends money, find out which donors and documents your lender accepts.
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Then it is not a no-repayment gift. Tell the lender so it can review the debt and the source of funds.
Write down who is providing the money and what you are expected to repay.
Do not sign a gift letter saying there is no repayment if repayment is expected.
The lender needs to review whether the funds and debt are allowed. Do not assume the home loan will qualify.
It may be a gift, but the donor, documents and transfer still need lender review.
Ask whether this person is allowed under your loan program and property rules.
A gift letter needs required details such as the amount, relationship, donor contact information and no expected repayment.
The lender must verify the money. A $5,000 deposit alone does not prove an acceptable gift.
Clarify that before calling the money a gift. Hidden repayment terms can change the lender review.
Find out whether they expect repayment, even later.
Do not describe repayable money as a no-repayment gift.
Ask which donor and document rules apply before relying on the funds.
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A family or family-like relationship may be acceptable under some loan rules. Do not assume every donor or property qualifies. Ask the lender what is allowed.
For example, a $5,000 deposit does not by itself show who gave it, whether it is a gift or where it came from. Ask which gift letter and transfer records are needed.
Assistance and gifts are not interchangeable. Tell the lender about any expected repayment.
The loan program decides allowed uses. Your down payment is only part of the money needed.
Ask what documents the lender needs and which rules apply before relying on the funds.
No. Disclose expected repayment.
No. Funds and transfer must also be verified.
No. Fannie Mae disallows gifts for investment property.
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