Down Payment Gift Letter Template

The template

Copy, fill in, sign with the donor, and send to your loan officer:

GIFT LETTER

Date: ____________

To: [Lender Name]
RE: Mortgage application of [Buyer Full Legal Name]
    Subject Property: [Property Address]

I, [Donor Full Legal Name], hereby certify the following:

1. I have made, or will make, a gift of $______________ to [Buyer Full Legal Name],
   my [relationship: parent / sibling / spouse / domestic partner / fiancé /
   grandparent / etc.], for use toward the purchase of the property listed above.

2. This gift is a bona fide gift. No repayment is expected or implied, in
   whole or in part, in cash, services, or future consideration.

3. The funds being provided are from my own resources, on deposit at
   [Bank Name], Account ending in [last 4]. Source of funds is [employment
   savings / sale of asset / retirement account / etc.].

4. The funds will be transferred to [Buyer / closing agent / escrow] on or
   about [date] via [wire transfer / cashier's check / direct transfer].

Donor:                          Buyer / Recipient:
___________________________     ___________________________
[Donor Signature]               [Buyer Signature]

___________________________     ___________________________
Printed Name                    Printed Name

Address: __________________     Address: __________________
Phone:   __________________     Phone:   __________________
Email:   __________________     Email:   __________________

Download as .txt

The 4 rules underwriters check

1. Donor must be an acceptable source.
   • Conventional: family member, spouse, domestic partner, fiancé, or "any individual with a documented familial relationship" per Fannie/Freddie.
   • FHA: family, employer/labor union, charity, government agency, or a "close friend with a clearly defined and documented interest."
   • VA: anyone, as long as not the seller, builder, agent, or another interested party.
   • USDA: same restrictions as FHA.
2. Source of funds must be documented. The donor's most recent bank statement showing the funds were on deposit BEFORE the gift, and ideally seasoned 60 days.
3. Transfer must be traceable. Wire receipt or cashier's check copy + matching deposit on the buyer's statement (or sent directly to the closing agent). Never cash. Never multiple smaller deposits to hide a single large one.
4. No repayment. If the donor expects repayment, it's a loan, not a gift - and most loans must be disclosed and counted in DTI.

IRS & tax considerations (for the donor)

• The 2026 annual gift exclusion is $19,000 per recipient per year. A married couple can gift $38,000 to one recipient.
• Above the exclusion, the donor files Form 709 to report the gift against their lifetime exemption ($13.99M in 2026) - usually no tax is actually owed.
• The recipient owes no income tax on a gift.
• If the donor gifts more than the annual exclusion to both spouses, you can double up by splitting between accounts (consult a CPA).

Common rejection reasons

• Donor signed but not the recipient.
• Source bank statement omitted.
• Funds deposited 2 days before signing the letter (looks like a loan dressed up as a gift).
• Donor is the seller or seller's relative (interested-party rules block this).
• Letter dated AFTER closing - must be dated before the gift transfer.

This template covers the documentation pattern accepted by the major investors but does not replace your lender's program-specific gift letter. Some lenders require their own form. Always send this draft to your LO first; they may ask you to use their template.