A mortgage gift letter is short and does one job: it tells the underwriter that money in the borrower's account is a true gift, not a loan that has to be paid back. If it were a loan, it would change the borrower's debt-to-income ratio and could sink the approval. The wording differs a little by loan type, so rather than one generic blank, the three filled examples below show what each actually looks like. Prefer to skip the copy-paste? The free gift letter generator builds any of these from your details in under a minute.
When your lender requires a gift letter
You'll be asked for a gift letter any time part of your down payment or closing costs comes from someone other than you — usually a parent or close relative. The lender is verifying two things: that the money is a gift with no repayment expected, and that it came from an acceptable source. Expect to provide a gift letter when:
- A relative deposits money into your account toward the purchase.
- The donor wires funds directly to escrow or the title company at closing.
- A large, recent deposit shows up in your statements that the underwriter can't trace to your income.
Most lenders also want a paper trail backing the letter — a copy of the donor's check or wire and matching deposit. FHA and VA loans add a rule on who may give: the donor generally must be family or another defined party with no interest in the sale.
Example 1 — Conventional loan gift letter
The standard version most buyers use. It names the donor and amount, ties the gift to the property, identifies the source account, and states plainly that nothing is owed back.
GIFT LETTER
June 7, 2026
To Whom It May Concern:
I, Robert A. Smith, am making a gift of $30,000 to my daughter, Jennifer Smith, to be applied toward her purchase of the property located at 456 Maple Avenue, Springfield, IL 62704.
The source of these funds is my account at First National Bank, account ending in 4821. The funds were transferred on June 5, 2026.
This is a bona fide gift. There is no obligation, expressed or implied, to repay this gift in cash, services, or otherwise, now or at any time in the future.
Donor: Robert A. Smith · 123 Oak Street, Springfield, IL 62704 · (555) 123-4567 · robert@email.com · Relationship: parent
Signature: __________________________ Date: ____________
Why it works: it states the exact amount, the source account (so the underwriter can match the deposit), and the no-repayment line in unambiguous terms. Generate this version →
Example 2 — FHA loan gift letter
FHA adds one critical sentence: the gift cannot come from anyone with an interest in the sale (the seller, builder, agent, or lender). Otherwise it mirrors the conventional letter.
GIFT LETTER
June 7, 2026
To Whom It May Concern:
I, Maria L. Garcia, am gifting $12,500 to my son, David Garcia, who is my son, to be used toward the down payment and closing costs on his FHA-financed purchase of 89 Birch Lane, Aurora, IL 60505.
These funds come from my savings account at Lakeside Credit Union, account ending in 7310, and were transferred on June 6, 2026.
This is a bona fide gift with no expectation of repayment, now or in the future, in any form. No part of this gift was provided by any party to the transaction, including the seller, builder, real estate agent, or lender.
Donor: Maria L. Garcia · 22 River Road, Aurora, IL 60505 · (555) 987-6543 · maria@email.com · Relationship: parent
Signature: __________________________ Date: ____________
Why it works: the extra "no party to the transaction" sentence is exactly what FHA underwriters look for. The donor's relationship is stated, because FHA limits eligible donors. Generate this version →
Example 3 — Parent-to-child gift letter
The most common case, and the simplest. When the property isn't finalized yet, you can omit the address — the gift still stands on the amount, the relationship, and the no-repayment statement.
GIFT LETTER
June 7, 2026
To Whom It May Concern:
We, James and Patricia Nguyen, are giving a gift of $50,000 to our daughter, Emily Nguyen, to help with the purchase of her first home.
The funds will be transferred from our joint account at Heritage Bank, account ending in 1192, on or about June 20, 2026.
This is a bona fide gift. There is no obligation, expressed or implied, for Emily to repay any portion of this gift at any time.
Donors: James Nguyen and Patricia Nguyen · 7 Cedar Court, Naperville, IL 60540 · (555) 222-3344 · nguyens@email.com · Relationship: parents
Signatures: __________________________ __________________________ Date: ____________
Why it works: both donors sign (the money is from a joint account), and the letter still satisfies the lender without a property address. Generate this version →
The 2026 gift-tax note
A down-payment gift is never taxable income to the person receiving it. The only tax question is on the giver's side, and for most families the answer is "no tax, maybe a form." In 2026 you can give up to $19,000 per recipient ($38,000 from a married couple splitting the gift) with no filing at all. Give more than that to one person and you file a Form 709 — but you still owe nothing until you've used up the ~$15 million lifetime exemption, which almost no family does.
A $50,000 down-payment gift from two parents to one child is $25,000 from each — above the $19,000 exclusion, so each parent files a Form 709 for the $6,000 overage. No tax is due; it just records against the lifetime exemption. The free Gift Tax Calculator shows exactly who crosses the line and whether a 709 is needed.
Gift or loan? Decide before you sign
A gift letter is a one-way door: it states in writing that the money will not be repaid. That's what the lender needs — but it also means that, in many states, the funds can be treated as a divisible gift if the recipient later divorces. If you'd want the money back under some circumstances, a documented loan is the better tool. The loan vs. gift comparison walks through the trade-off, and protecting family money in a divorce covers keeping a gift separate.
Frequently asked
Does a gift letter have to be notarized?
Usually no. Most lenders accept a typed, signed gift letter with the required details. A few may ask for notarization or a specific form — check with your loan officer, but the wording in these examples is what underwriters look for.
What information must a gift letter include?
The donor's name, address, phone, and email; the donor's relationship to the borrower; the exact gift amount; a clear no-repayment statement; and usually the property address and source account, plus the donor's signature and date.
Can a gift letter be used for an FHA or VA loan?
Yes. FHA and VA both allow gift funds, but the donor must be family or another permitted party with no interest in the sale, and the letter should state that no party to the transaction provided the funds — see the FHA example above.
This guide is general information, not legal, tax, or lending advice. Lender requirements and IRS figures change; confirm the exact wording your lender needs and verify current numbers with the IRS and your loan officer before relying on them.
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