What Is a Gift Letter for a Mortgage? Requirements, Format, and Examples

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What is a mortgage gift letter?

A mortgage gift letter is a document signed by the person giving you money for your home purchase. It states the amount, who the donor is, and that the donor does not expect to be repaid. Fannie Mae's Selling Guide puts it this way: "Gifts must be evidenced by a letter signed by the donor, called a gift letter." HUD's FHA handbook defines gifts as "contributions of cash or equity with no expectation of repayment."

Lenders ask for the letter because money you must pay back is a debt, not a gift, and a lender needs to know about your debts. The letter also lets the lender confirm who the donor is and that the donor is an acceptable source. HUD's handbook tells FHA lenders they must be able to make "a reasonable determination that the gift funds were not provided by an unacceptable source."

Gift funds can go toward more than the down payment. Fannie Mae says gift funds "may fund all or part of the down payment, closing costs, or financial reserves." For how those pieces add up on closing day, see our guide to cash to close.

What must a gift letter include?

The required contents come from the loan program, and your lender may ask for more. Two sets of rules are published by the programs themselves.

For a Fannie Mae conventional loan, the gift letter must:

• specify the actual or the maximum dollar amount of the gift;
• include the donor's statement that no repayment is expected; and
• indicate the donor's name, address, telephone number, and relationship to the borrower.

For an FHA loan, HUD's handbook says the lender must obtain a gift letter signed and dated by the donor and the borrower that includes:

• the donor's name, address, and telephone number;
• the donor's relationship to the borrower;
• the dollar amount of the gift; and
• a statement that no repayment is required.

VA and USDA loans, and Freddie Mac conventional loans, have their own guides. Ask your loan officer for the exact wording your lender accepts before you ask anyone to sign.

Gift letter requirements at a glance

Who can give a gift for a down payment?

Acceptable donors depend on the loan program, and the two programs below define them differently. This is the most common point of confusion for buyers who plan to receive help from several people.

Who can give on a Fannie Mae conventional loan?

Fannie Mae accepts gifts from two groups. The first is a relative, defined as "the borrower's spouse, child, or other dependent" or anyone related to the borrower by blood, marriage, adoption, or legal guardianship. The second is a non-relative who shares a familial relationship with the borrower: a domestic partner (or the domestic partner's relative), someone engaged to marry the borrower, a former relative, or someone with a "long-standing familial-like or mentorship relationship" with the borrower. The donor may not be, or have any affiliation with, the builder, the developer, the real estate agent, or any other interested party to the transaction.

Who can give on an FHA loan?

HUD's handbook lists five acceptable sources of gift funds: the borrower's family member; the borrower's employer or labor union; a close friend with a clearly defined and documented interest in the borrower; a charitable organization; and a governmental agency or public entity with a homeownership assistance program for low- or moderate-income families or first-time homebuyers. Some employers offer housing assistance. Employer contributions are not currently supported on Dreamfund.

The handbook defines family member as a child, parent or grandparent (including step and foster relationships), spouse or domestic partner, legally adopted son or daughter, foster child, brother or sister (including step), uncle or aunt, or an in-law of the borrower. For a deeper comparison of the two programs, read FHA vs conventional gift fund rules.

What about VA, USDA and Freddie Mac loans?

Each program publishes its own donor and documentation rules, and this post does not state them. Ask your loan officer which donors and which documents your loan type accepts.

What proof does the lender need besides the letter?

The letter alone does not complete the file, because the lender must also verify the money moved. Both programs describe the same basic evidence.

Fannie Mae requires the lender to verify that enough funds to cover the gift are in the donor's account or have been transferred to the borrower's account. Acceptable documentation includes the donor's check and the borrower's deposit slip, the donor's withdrawal slip and the borrower's deposit slip, evidence of an electronic transfer from the donor's account to the borrower's account or the closing agent, the donor's check to the closing agent, or a settlement statement showing receipt of the donor's check.

For FHA loans where the gift is verified before settlement, the lender obtains the donor's bank statement showing the withdrawal and evidence of the deposit into the borrower's account, a copy of the donor's canceled check and evidence of deposit, a copy of the donor's withdrawal receipt and evidence of deposit, or evidence of an electronic transfer from the donor's account to the borrower's account. If the gift is verified at settlement, the lender obtains evidence of payment to the settlement agent, such as an electronic transfer, a bank certified check, a cashier's check, or another official bank check.

Do I need a separate gift letter for each person who gives?

Plan on one letter per donor, because the letter is signed by the donor and names that donor's relationship to you. Each donor's gift also needs its own proof of transfer. Ask your lender how it wants multiple gifts documented before you collect anything.

Fannie Mae adds one rule that catches people out. When a gift is pooled with the borrower's own funds to make up the required minimum cash down payment, the file must also include a certification from the donor that they have lived with the borrower for the past 12 months and will continue to do so in the new residence, along with documents showing shared residency. Ask your lender whether this applies to your loan.

For ideas on how to ask relatives for help, see how to ask family for down payment help and how family can help with your down payment. Donors also have their own tax questions, covered in our gift tax guide for supporters.

What goes wrong with gift letters?

Based on what the programs require, these are the points where a file can stall:

• The letter leaves out a required item, such as the no-repayment statement or the donor's telephone number.
• The wrong signatures are on it (an FHA letter needs the borrower's signature as well as the donor's).
• The donor is not an acceptable donor for the loan program.
• The donor's funds cannot be shown to have moved, or the donor's source of funds is cash on hand on an FHA loan.
• A gift is a repayable loan in disguise. If anyone expects repayment, it is not a gift and the letter would be inaccurate.

A grant from a nonprofit, agency or lender is a different thing from a personal gift and is handled under separate rules. See our down payment assistance guide for how grants work, and how to stack gifts with assistance programs for combining them. If you are earlier in the process, start with the first-time homebuyer hub.

How does Dreamfund fit in?

Dreamfund is building community gifting around these requirements. Each gift is recorded with who gave it, their relationship to the buyer, and a signed no-repayment attestation. The buyer's lender decides what gift documentation it accepts.

Sources

• Fannie Mae, Selling Guide B3-4.3-04, Personal Gifts (topic dated February 4, 2026).
• HUD, FHA Single Family Housing Policy Handbook 4000.1, Update 18, last revised August 12, 2026 (sections on Gifts, Personal and Equity, and the definition of Family Member).

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