Can I Use Gift Money for My Down Payment? Here’s What You Need to Know💵

When my client Sarah called me, she was absolutely buzzing with excitement.

She said, “My parents want to help me buy my first home! They’re going to give me part of the down payment!”
Then came the next question (in a slightly more nervous tone):
“Is that even allowed? Will it mess up my loan?”

It’s a question I hear often—and the answer is important. So let’s clear it up:

✅ Yes, you can use a financial gift for your down payment.
But like most things in the mortgage world, there’s a right way to do it.

Here’s what I told Sarah (and what you need to know too):

1. The gift must be properly documented.
This usually includes:

A signed gift letter stating that the money is a gift—not a loan—and no repayment is expected.
Proof of transfer (bank statements, wire transfer confirmation, or a check copy with deposit receipt).
Sometimes, a paper trail showing the donor’s ability to give the gift (especially with large amounts).

2. Different loan types have different rules.
FHA, Conventional, VA, and USDA loans all handle gift funds a little differently. For example:

FHA loans allow the entire down payment to come from a gift.
Conventional loans may require a minimum contribution from the borrower depending on the loan size and occupancy.
That’s where having a mortgage pro in your corner (👋 hi, that’s me) makes a huge difference.

3. The biggest mistake?
Depositing gift money before talking to your lender.

Random or unexplained large deposits in your account can trigger red flags in underwriting—slowing down your loan approval or even requiring extra documentation to clear up confusion.

So if you’re planning to use gift funds from family…
Let’s talk early.
We’ll get the right documentation in place before money changes hands so the process stays smooth from start to finish.

Your path to homeownership should be joyful—not jammed up by red tape.

Let’s make sure that generous gift turns into keys in your hand, faster.