Mortgage Gift Letter 2026: Down Payment Gift from Parents | Free Template & Requirements
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Down Payment Gift Expert | 10+ Years
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Using gift money for down payment? Learn mortgage gift letter requirements, IRS rules ($19K annual limit), free template, and how to properly document gifts from parents or family. Complete 2026 guide with examples and lender requirements.
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Find Lenders Accepting Gift Funds →What is a Mortgage Gift Letter?
📋 Gift Letter Definition:
A mortgage gift letter is a signed document stating that money given to you for a down payment is a gift, not a loan. It confirms the donor doesn't expect repayment and has no ownership interest in the property. Lenders require this to ensure you're not taking on hidden debt.
Why Lenders Require Gift Letters:
• Verify money is truly a gift (not a loan that increases your debt)
• Confirm donor has no ownership claim on property
• Ensure you can afford mortgage without hidden obligations
• Meet Fannie Mae/Freddie Mac/FHA/VA requirements
• Prevent mortgage fraud
Need help with gift funds? Get matched with a lender who can guide you through the gift letter process and requirements.
Free Mortgage Gift Letter Template
Complete Gift Letter Template (Copy & Customize)
GIFT LETTER
Date: [Current Date]
I/We, [Donor Name(s)], hereby certify the following:
1. I/We have made a gift of $[Gift Amount] to [Borrower Name(s)], my/our [Relationship - son, daughter, etc.].
2. This gift is to be applied toward the purchase of property located at [Property Address].
3. No repayment of this gift is expected or implied in the form of cash, services, or any other form.
4. I/We have no ownership interest in the property, now or in the future.
5. The source of these funds is: [Bank name, account type]
Donor Information:
Name: [Full Name]
Address: [Full Address]
Phone: [Phone Number]
Email: [Email Address]
Relationship to Borrower: [Relationship]
Donor Signature: _________________ Date: _______
Borrower Acknowledgment:
I/We acknowledge receipt of this gift.
Borrower Signature: _________________ Date: _______
⚠️ Important:
This is a basic template. Your lender may have their own gift letter form. Always use your lender's form if provided, or have them review this template before signing.
Want lender-approved gift letter? Get pre-approved and receive your lender's official gift letter template.
📋 Get Lender-Approved Gift Letter Template
Get your lender's official gift letter form and expert guidance on documentation. Free consultation.
Get Official Gift Letter Form →Gift Letter Requirements by Loan Type
| Loan Type | Who Can Give Gifts | Max Gift Amount | Borrower Contribution |
|---|---|---|---|
| Conventional | Family, fiancé, domestic partner | 100% of down payment | 0% if 20%+ down, 5% if less |
| FHA | Family, employer, charity, govt | 100% of down payment | 0% required |
| VA | Anyone (family, friends, etc.) | 100% of costs | 0% required |
| USDA | Family, employer, charity, govt | 100% of costs | 0% required |
Conventional Loans: Family Members Only
Acceptable donors: Parents, grandparents, siblings, children, spouse, fiancé, domestic partner.
Down payment rules:
• 20%+ down: 100% can be gift (no borrower contribution)
• 10-19% down: 5% must be borrower's own funds
• 5-9% down: 5% must be borrower's own funds
• 3-4% down: 5% must be borrower's own funds
FHA Loans: Most Flexible
Acceptable donors: Family, employer, labor union, close friend with documented interest, charity, government agency.
✅ Best for Gift Funds:
100% of down payment (3.5%) can be gift. No borrower contribution required. Most flexible gift rules.
VA Loans: Anyone Can Give
Acceptable donors: ANYONE (family, friends, employer, charity, etc.). Most flexible.
100% of closing costs and funding fee can be gift. No down payment required anyway (0% down). Friends can give gifts (unlike conventional).
Not sure which loan type is best for gift funds? Compare lenders and get expert advice on the best loan for your situation.
💰 Using Gift Funds? Find the Best Loan Type
Get matched with lenders and discover which loan type (FHA, VA, Conventional) works best for your gift situation.
Find Best Loan for Gift Funds →IRS Gift Tax Rules 2026
💰 Annual Gift Tax Exclusion 2026:
$19,000 per person per year (2026 limit). Gifts under $19K don't require IRS reporting. Gifts over $19K require Form 709 but usually no tax owed (counts toward lifetime exemption).
Examples:
• Parent gives $19K to child: No reporting needed
• Parent gives $50K to child: File Form 709, no tax (uses lifetime exemption)
• Both parents give $19K each = $38K total: No reporting needed
• Both parents give $50K each = $100K total: File Form 709, no tax
Strategy #1: Split Between Parents
Each parent can give $19K = $38K total with no IRS reporting.
Example: Need $40K down payment. Mom gives $19K, Dad gives $19K = $38K (no reporting). You contribute $2K from savings. Total: $40K down payment.
Strategy #2: Give to Both Spouses
Parents can give $19K to each spouse = $76K total with no reporting.
Example: Mom gives $19K to you + $19K to spouse = $38K. Dad gives $19K to you + $19K to spouse = $38K. Total: $76K with no IRS reporting!
Strategy #3: Lifetime Exemption
Gifts over $19K use lifetime exemption ($13.61M in 2026). No tax until you exceed lifetime limit.
Example: Parent gives $100K. File Form 709. Uses $81K of lifetime exemption ($100K - $19K annual exclusion). No tax owed. Still have $13.53M lifetime exemption left.
Need tax advice on large gifts? Get matched with a lender who can connect you with tax professionals for gift planning.
How to Document Gift Funds
Get Gift Letter Signed
Use lender's gift letter template or the template above. Donor signs and dates. You sign acknowledging receipt.
Provide Donor's Bank Statements
Lender needs 2-3 months of donor's bank statements showing they have the funds. Proves gift is from legitimate source.
Transfer Funds & Document
Donor transfers money to your account. Provide: (1) Donor's withdrawal receipt, (2) Your deposit receipt, (3) Bank statement showing deposit.
⚠️ Timing Matters:
Best to receive gift 60+ days before applying. If less than 60 days, need full documentation. If 60+ days, lender may not need donor's statements.
Submit to Lender
Provide all documentation to lender: Gift letter, Donor's bank statements, Transfer receipts, Your bank statement showing deposit.
Need help with documentation? Get matched with a lender who can guide you through the gift documentation process step-by-step.
📋 Get Expert Help with Gift Documentation
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Get Gift Documentation Help →Frequently Asked Questions
Have questions about gift letters? Connect with a gift funds specialist who can answer all your questions.
💝 Using Gift Money for Down Payment? Get Expert Help
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