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Best way to get a financial gift when buying a home?
We have family that want to help us buy our first home. We were pre-approved and the lender said something about financial gifts and kind of seemed like we can't get them?? We're confused on the rules. It would be a big help to have this money towards our downpayment. So, what's the best way for us to receive this money when buying a home?
Asked By Maggie | Scottsdale, AZ | 148 views | Finance Legal Info | Created 1 month ago
Answer(8)
Nicole Serviss
The Serviss Group with RE/MAX Elite
Yes, you can often use family gift funds for your down payment, but the lender has to see it documented correctly. They usually need a gift letter from your family member and proof of the transfer into your account. Each loan program has slightly different rules, so check with your lender to make sure the funds are set up the right way.
- 1 month ago
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Blossom Vernon
BHHS - Jordan Baris Realty
Best Way to Get a Gift for a Home Purchase
Ask a Close Family Member (parents are number one on the list
Have Them Transfer the Funds Officially → check or wire, no cash.
Sign a Gift Letter → it states the money is a gift, not a loan.
Provide Bank Proof → so the lender sees where it came from.
Who’s #1 to Gift?
Parents are the top, easiest, and most accepted source of a down payment gift. After that, it can be grandparents, siblings, or sometimes very close relatives/friends (depending on loan type). Bottom line: Ask mom or dad first, Siblings are next in line —they’re the cleanest source and lenders love it.
Ask a Close Family Member (parents are number one on the list
Have Them Transfer the Funds Officially → check or wire, no cash.
Sign a Gift Letter → it states the money is a gift, not a loan.
Provide Bank Proof → so the lender sees where it came from.
Who’s #1 to Gift?
Parents are the top, easiest, and most accepted source of a down payment gift. After that, it can be grandparents, siblings, or sometimes very close relatives/friends (depending on loan type). Bottom line: Ask mom or dad first, Siblings are next in line —they’re the cleanest source and lenders love it.
- 1 month ago
- Helpful (2)
- Unhelpful (0)
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Amanda Courtney
REP Realty Group
The best way for a home buyer to receive a financial gift is through a properly documented gift letter approved by the mortgage lender. The letter should confirm the funds are a gift, not a loan. Always verify your lender’s requirements before the transfer and ask your real estate agent to guide you through the process.
- 1 month ago
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Cindy Herrera
EXP Realty
This comes up all the time for my first-time homebuyers. The good news is yes, your family can help with your down payment! Lenders just have rules on how that “gift money” is received. It has to be documented with a gift letter and a clear paper trail. The safest way is having your family transfer the funds directly from their bank to yours (or to escrow) so it’s clean and easy to verify. What you want to avoid is cash deposits or money bouncing between accounts, that’s when lenders start saying no. Tip: talk to your lender before your family moves the money, so you don’t have to redo anything. With the right steps, family gifts are one of the best ways to get into your first home faster and with less stress.
- 1 month ago
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Varsha Upadhye
Coldwell Banker
Yes, family and close relative can always gift funds towards down payment. The gift fund needs a paper trial, can be direct deposit, and most importantly has to be seasoned.
Each lender may have their own requirement, but these three are the basic.
Each lender may have their own requirement, but these three are the basic.
- 1 month ago
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Tolga (Tony) Erzene
Keller Williams Integrity
Yes, you can absolutely use family gift funds toward your down payment, but the lender requires a clear paper trail: the money must come from an immediate family member, be accompanied by a signed gift letter stating it’s not a loan, and be transferred by check, wire, or direct deposit (never cash) with documentation showing the donor’s withdrawal and your deposit; ideally the funds are deposited at least 60 days before closing so they appear “seasoned,” though many lenders also allow the gift to be wired directly to the title company at closing, so the best way is to have your family transfer the funds in a traceable manner, complete the lender’s gift letter, and provide all proof of transfer to keep everything clean and approved.
- 1 month ago
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Jason Craig
Coldwell Banker
Most loan programs allow gift funds from family to be used for your down payment and closing costs, but the lender has to be able to prove where the money came from. The donor generally needs to be an immediate relative and will sign a simple "gift letter" that states the funds are a true gift with no expectation of repayment. Your lender may also ask the donor for a bank statement showing they had the money on hand, and a copy of the transfer or cashier's check so there is a paper trail from their account to yours or to escrow.
Different loan types have slightly different rules: FHA and VA will allow 100% of the down payment to be gifted; conventional loans often require you to contribute at least some of your own funds if your down payment is below 20%. Some lenders want the gift money deposited into your account 60 days before closing so it shows up on two months of bank statements; others are fine with a direct transfer at closing so long as it is documented. Be sure to talk with your loan officer about their specific requirements so you don’t run into underwriting issues.
There may also be gift tax considerations for the donor if the amount exceeds the annual exclusion, so it’s a good idea for your family member to consult a tax advisor. With the proper documentation a financial gift from family is a common and accepted way to help buyers get into their first home.
Different loan types have slightly different rules: FHA and VA will allow 100% of the down payment to be gifted; conventional loans often require you to contribute at least some of your own funds if your down payment is below 20%. Some lenders want the gift money deposited into your account 60 days before closing so it shows up on two months of bank statements; others are fine with a direct transfer at closing so long as it is documented. Be sure to talk with your loan officer about their specific requirements so you don’t run into underwriting issues.
There may also be gift tax considerations for the donor if the amount exceeds the annual exclusion, so it’s a good idea for your family member to consult a tax advisor. With the proper documentation a financial gift from family is a common and accepted way to help buyers get into their first home.
- 3 weeks ago
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