Mortgage Gift Letters: What to Include and How to Document Gift Funds

If someone plans to help with your home purchase, tell your loan officer before moving the money. A mortgage gift letter explains that the contribution is a gift rather than money you must repay. But the letter is only part of the review: the lender also needs to confirm that the donor, the funds, and the transfer meet the requirements of your chosen loan.

Start by Asking Whether Your Loan Allows the Gift

The Consumer Financial Protection Bureau cautions that some kinds of loans do not allow down-payment gifts. Ask your loan officer whether the proposed gift is permitted for the specific mortgage, property, and occupancy you are considering. Do not assume a rule you heard about another customer's transaction applies to yours.

For a concrete example, Fannie Mae's Personal Gifts guidance allows qualifying gifts for a principal residence or second home to fund all or part of the down payment, closing costs, or financial reserves, subject to its requirements. That section does not allow personal gifts on investment properties. These are Fannie Mae rules, not a universal standard for every mortgage product.

What Must a Mortgage Gift Letter Include?

Under Fannie Mae's gift-letter requirements, the donor signs a letter that specifies the actual or maximum dollar amount of the gift, states that no repayment is expected, and identifies the donor's name, address, telephone number, and relationship to the customer receiving the gift. Use the lender's instructions for your transaction rather than assuming an online template is sufficient.

• ▸Gift amount: State the actual amount or permitted maximum as instructed by the lender.
• ▸Repayment: Clearly state that the donor does not expect repayment.
• ▸Donor information: Include the donor's name, address, and telephone number.
• ▸Relationship: Identify the donor's relationship to the customer.
• ▸Signature: Have the donor sign the letter, and ask about any additional information the lender requires.

Fannie Mae has additional documentation rules for certain circumstances, including gifts sourced through a donor's trust or estate and some gifts pooled with the customer's funds. Ask the lender to review these situations before relying on a basic letter. If the amount changes, tell the loan officer so the application and documentation can be reviewed for consistency.

Who Can Give the Money?

For loans using its Selling Guide, Fannie Mae lists specified relatives and certain non-relatives with familial relationships as acceptable donors. Examples include a spouse or someone related by blood, marriage, adoption, or legal guardianship; the guidance also recognizes certain long-standing familial-like or mentorship relationships. The lender must determine whether the actual relationship fits the rules.

There are also restrictions involving builders, developers, real estate agents, and other interested parties, along with specific exceptions in the guide. A contribution from someone connected to the transaction needs careful review. Do not assume that a gift from any friend, business contact, or seller automatically qualifies.

Why Is a Signed Letter Not Enough?

The lender must verify the funds, not just the promise to give them. Fannie Mae requires verification that sufficient funds are available in the donor's account or have been transferred to the customer's account. Its guidance describes several acceptable forms of evidence, depending on how the contribution is made.

Examples include a donor's check and the customer's deposit slip, withdrawal-and-deposit records, evidence of an electronic transfer to the customer or closing agent, or specified records of a donor's payment to the closing agent. This does not mean every customer must provide every document on the list. Ask which evidence the lender will accept for your proposed transfer.

CFPB also explains that lenders may ask you to document the source of large deposits. Keep the relevant records and ask for precise submission instructions. A visible balance in your account does not, by itself, explain where a recent deposit came from.

Can the Donor Send Funds Directly to Closing?

That can be possible under the applicable rules. For Fannie Mae loans, if the gift is not transferred before settlement, the lender must document the donor's delivery to the closing agent by an electronic transfer, certified check, cashier's check, or other official check. Confirm the permitted method, timing, and documentation with both the lender and closing agent before sending funds.

You do not need to guess which account should receive the money. Ask for transaction-specific instructions first, and retain the evidence of the completed transfer. Follow the lender's secure document-submission process rather than sending financial records through an unfamiliar channel.

Can a Gift Cover Everything You Need at Closing?

Not always. Fannie Mae's minimum-contribution rules vary with the property's occupancy, number of units, and financing ratios; certain transactions require the customer to contribute their own funds. Other products have their own requirements. Ask your loan officer which costs the gift may cover and whether an own-funds contribution applies to your application.

Keep gifts and borrowed funds distinct. CFPB's down-payment guidance says that, for some loans, gift funds require proof of their source and a signed statement that they are not a third-party loan. Borrowing the money can increase your debt and monthly payments. Tell the lender about any repayment obligation instead of treating it as a gift.

A Practical Checklist Before Moving Gift Funds

• ▸Confirm that gifts are allowed for the selected loan and property.
• ▸Have the lender review the donor's relationship and any connection to the transaction.
• ▸Request the gift-letter instructions and identify any special documentation requirements.
• ▸Agree on the transfer method and keep the records the lender needs to verify it.
• ▸Confirm whether your own contribution is required and whether the gift amount fits the current closing calculation.
• ▸Report changes promptly and confirm that the lender has received the complete documents.

Customers buying in Florida, Georgia, Tennessee, Texas, or Colorado can use this checklist to prepare a gift-funds conversation. Approval still depends on the complete application and current requirements. Ask a qualified tax or legal adviser about any individualized gift-related reporting or legal questions; this guide does not establish tax treatment.

General education disclosure: This article is not individualized lending, financial, legal, or tax advice, a commitment to lend, or a guarantee that a donor, gift, transfer method, or loan application will be accepted. Sources were accessed October 15, 2026. Fannie Mae details are presented as program-specific examples, not requirements for every mortgage. Use the lender's current written instructions for your transaction.

Sources

Official sources opened and read on October 15, 2026: Fannie Mae Selling Guide: Personal Gifts; CFPB: Submit documents and answer requests from the lender; and CFPB: Where can I get money for a down payment? The Fannie Mae section is dated February 4, 2026. Accessing these pages today does not imply that all source pages were published or revised today.