Gift Letter for Mortgage Template (2025) | FHA, VA, Equity Guide

Getting a mortgage gift in 2025? Don’t lose your loan over a missing letter.

A gift letter for mortgage is required by FHA, VA, and conventional lenders to confirm that your down payment gift is truly a gift — not a hidden loan. One mistake can stall or kill your approval.

This guide gives you:

• A free gift letter for mortgage template

• 2025 rules by loan type (FHA, VA, conventional)

• Step-by-step documentation tips

Equity gift rules from parents or family

Whether it's a cash gift from mom or a gift of equity, this blog makes sure your money is accepted without hiccups.

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A gift letter for mortgage is a formal, signed statement confirming that money given to you for a home purchase — usually for the down payment — is a gift, not a loan.

It’s a critical document mortgage lenders require to:

• Prove the source of funds

• Show you’re not secretly borrowing money

• Avoid disrupting your debt-to-income ratio (DTI)

This letter must come from the person gifting you the money — usually a parent, sibling, grandparent, or even an employer or charitable organization, depending on loan type.

Here’s what a mortgage gift letter should always include:

• Full name of the donor

• Relationship to the borrower

• Exact amount of the gifted funds

• The purpose (e.g., “down payment for 456 Main St, Texas”)

• No-repayment clause (“This is a gift. No repayment is expected.”)

• Donor’s signature and date

Pro Tip: Lenders often request a bank statement from the donor AND recipient to prove the source and transfer of funds. This prevents fraud and ensures the money is “seasoned.”

Here’s a mortgage-approved gift letter template you can copy, customize, or download as a Word or PDF file.

Whether you're applying for an FHA loan, conventional mortgage, or VA loan, this sample gift letter works for all lenders — including Fannie Mae and Freddie Mac.

Use this template if you're receiving:

• A cash gift for a mortgage down payment

• A gift of equity from parents or relatives

• A monetary gift to help with closing costs

This mortgage gift letter format meets requirements for:

• FHA gift letter rules

• Conventional loan documentation

• VA and USDA lender guidelines

• Bank verification for gift funds

Need to show proof? Attach this letter along with your bank statement, proof of transfer, or seasoned funds documentation for instant approval.

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Most lenders accept gift funds from close relationships — but not everyone qualifies. In 2025, knowing who can gift money for a mortgage is critical to avoid delays or rejections.

Here’s a verified list of eligible donors who can provide down payment gifts and sign a mortgage gift letter:

Not Allowed: Anyone who has a financial interest in the sale (e.g. seller, agent, builder)

Absolutely. A gift letter from parents to a child is the most common scenario. Just make sure:

• The funds are transferred from their account
• The gift letter clearly states no repayment is expected
• You attach their bank statement + transfer record

Parents helping kids buy their first home? You’ll need:

• A signed gift letter for mortgage down payment

• Proof of seasoned funds or a gift check

• Possibly a gift affidavit, depending on the lender

Using gift funds toward your mortgage down payment? Amazing — but it’s not just a bank transfer. You’ll need to document everything properly to avoid loan delays or denials.

Here’s how to use gifted money for your mortgage the right way:

1. Get a Signed Gift Letter

• Use it to confirm the money is a gift, not a loan

2. Collect Bank Statements

• The donor must show proof of available funds.
• You must show receipt of funds into your account.

3. Season the Funds (if needed)

• Ideally, receive the money 60+ days before mortgage application.
• This avoids red flags in underwriting (a process called “seasoning”).

4. Submit All Proof to Your Lender

• Attach gift letter, statements, and proof of deposit to your loan file.

What counts as “proof of gift” for mortgage?

A gift letter + bank statement + wire/transfer receipt = solid gold in underwriting.

No — most lenders do not allow gifted funds for investment property down payments.

✅ You can use gift funds for:

• Primary residences (FHA, VA, USDA, Conventional)

• Second homes (with conditions — see below)

❌ You cannot use gift funds for:

• Investment properties

• Commercial purchases

• Business-use mortgage loans

If you’re buying a rental or flipping a home — your own funds are required.

Some lenders want gift funds to appear 60+ days before application, so they’re not flagged as “unsecured loans.”

If you're close to applying, make sure:

• You document the gift transfer instantly
• You include the gift letter affidavit and bank records
• Ask your loan officer if seasoning is required for your mortgage type

Different home loans come with very different gift fund rules — and lenders check them closely. Here’s how to use a gift letter for mortgage approval based on the loan program you choose in 2025:

FHA loans are the most flexible when it comes to gift funds.

You can use a gift to cover 100% of your down payment and closing costs.

• Full donor info and relation
• Exact gift amount
• Clear “no repayment” clause
• Signature from both donor and borrower

• Family members (parents, siblings, grandparents, etc.)
• Domestic partners
• Employers or unions
• Charitable organizations
• Close friends with a documented relationship

FHA also allows gift of equity letters from family when buying their home.

VA loans don’t require a down payment — but gift letters are still used for closing costs or optional contributions.

• Family
• Friends
• Employers
• Nonprofits

• Seller or anyone with interest in the property sale

A VA mortgage gift letter must be signed and backed by proof of transfer (check, wire, etc.)

Conventional mortgages allow gift funds, but with tighter restrictions:

• 100% of down payment can come from gift funds

• Gift letter must comply with Fannie Mae gift letter template or Freddie Mac rules

• Allowed — but at least 5% must be your own funds if the LTV is above 80%

• Gift funds are not allowed

USDA loans offer 0% down, but buyers can use gifts for closing costs.

Gift letter must include:

• Donor name, relationship, and signature
• Exact gift amount
• “No repayment required” clause
• Documentation of fund transfer

Lenders may require:

• Gift affidavit

• Bank statements (donor + borrower)

• Wire transfer or check image

• Additional proof the gift wasn’t a disguised loan

If you're ever unsure, use our standard mortgage gift letter template (PDF) that satisfies all loan types.

Mortgage gift rules aren’t just about the loan — they also change based on the type of home you’re buying. Whether it’s your first house, a vacation property, or a future rental, here's what you need to know about gift funds and property eligibility.

If you're buying a primary home (your main place of living), you can use 100% gift funds for the down payment and closing costs — with no personal contribution required.

Allowed for:

• FHA, VA, Conventional, and USDA loans

• Single-family homes, condos, townhomes

Example: A gift letter for house purchase from parents fully covering the down payment is 100% acceptable under FHA guidelines.

Planning to buy a second home or vacation retreat? Gift funds are allowed — but with a catch.

You can use gift funds for:

• Conventional loans on second homes

You must contribute at least 5% of the down payment from your own funds if the loan-to-value (LTV) ratio is over 80%.

Can you use a gift for investment property down payments?

No — gift funds cannot be used for:

• Investment homes

• Rentals

• Multi-family flips

• Commercial properties

Lenders want to see 100% of the down payment from the borrower’s own funds for any income-generating real estate.

Using gift funds for an investment property can lead to denial or legal issues during underwriting. Always disclose your intentions clearly.

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Once you submit a mortgage gift letter, your lender doesn’t just check the signature and move on.

That letter — and the funds tied to it — go through underwriting, where loan officers evaluate whether your mortgage application still meets financial requirements like:

• DTI ratio (Debt-to-Income)

• LTV ratio (Loan-to-Value)

• Asset verification

• Legal gift status

Here’s what you need to know in 2025 👇

Yes — and in a good way.

When you use a gift for your down payment, it lowers your loan amount, which can reduce your monthly mortgage payment. This improves your debt-to-income ratio, making you look safer to lenders.

Example: If you receive $30,000 as a down payment gift, your total mortgage could be lower, meaning:

• Lower monthly payments

• Lower DTI ratio

• Better loan approval odds

They might — if you don’t prove it’s a gift.

Here’s what underwriters need:

• A signed mortgage gift letter

• A gift letter affidavit (if required)

• Bank statements from the donor and recipient

• Proof of wire, check, or transfer

• No signs of repayment agreements (texts, emails, etc.)

If anything looks like a loan in disguise, underwriting may reject it — or pause your approval until it’s resolved.

Yes. A mortgage gift letter is a legal document stating:

• The money is a gift

• There’s no expectation of repayment

• The donor will not hold ownership rights or equity in the property

Pro Tip: Always use a gift letter format that includes a legal declaration clause, like:

“This gift is given with no expectation of repayment and no future claim to the property.”

Big red flag. If you deposit gifted funds without a paper trail, underwriting might:

• Count it as unverified debt

• Delay your loan

• Trigger further documentation requests

• Flat-out deny your mortgage

Avoid this by submitting:

• Gift letter

• Donor bank statement

• Transfer proof

• Gift affidavit (if required)

Not always. Know the limits.

• Primary Residence: 100% gift funds allowed (FHA, VA, Conventional)
• Second Home: Gift OK, but must contribute 5% of your own money if LTV > 80%
• Investment Property: No gift funds allowed — must be all your own funds

Pro tip: Missing one document can delay your loan.

Follow these underwriting-proof steps:

✔️ Get a signed gift letter

✔️ Include donor + recipient bank statements

✔️ Show proof of transfer (check, wire)

✔️ Ask if your lender requires seasoning (60+ days)

If your gift looks like a hidden loan, your loan can be denied.

A properly documented gift letter for mortgage could be your golden key to approval — especially in a high-rate housing market like 2025.

Whether you're:

• Getting a gift letter from parents to cover your down payment

• Using a gift of equity to purchase a family home

• Or applying with FHA, VA, or conventional mortgage lenders

What matters most is proof, precision, and paperwork.

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A gift letter is a signed document stating that funds received for a down payment are a gift, not a loan. It’s required by all major lenders.

Yes. Parents are the most common donors. Just include their bank statement, a transfer receipt, and a signed gift letter.

• Donor’s name and relationship

• Gift amount

• Source of funds

• Statement of no repayment

• Signatures and date

Absolutely. FHA allows 100% of down payment via gift. VA loans allow gifts for closing costs. Just follow documentation rules.

Yes. It confirms the money is not a loan and gives no ownership or repayment rights to the donor.

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Compare options, calculate payments, and get expert guidance - all in one place.

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