Mortgage Gift Letter Template
The letter a mortgage lender asks for when family money helps pay for a home: who is giving how much, to whom, for which property, where the money comes from and how it is transferred — and the donor’s signed statement that it is a gift, not a loan.
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A general template, not legal advice — review it before you use it. Draftmill is not a law firm.
Gift Letter
Date: October 11, 2026
To: Larch Valley Home Loans, LLC
Loan number: LV-2026-104857
The undersigned donor (“Donor”) makes the following statements to Larch Valley Home Loans, LLC (“Lender”) about a gift to Emily Park and Daniel Park (“Borrower”) for the purchase of 5824 Larkspur Meadow Drive, Westerville, Ohio 43081 (the “Property”).
Donor | Robert Hayes and Linda Hayes |
Donor’s address | 1187 Wexford Glen Court, Dublin, Ohio 43017 |
Donor’s telephone | (614) 555-0186 |
Relationship to Borrower | parents of Emily Park |
Amount of the gift | $40,000.00 |
Date of transfer | October 21, 2026 |
Source of the funds | Donor’s joint savings account, account number ending in 4821 |
Transfer of the funds | by wire transfer directly to the closing agent, Hollis Creek Title Agency, LLC, before closing |
Donor certifies that:
Donor has given or will give Borrower a gift of $40,000.00 on or about October 21, 2026, to be applied toward the purchase of the Property, including the down payment and closing costs.
This is a true gift. No repayment is expected or required, in money or in services, now or in the future, and Borrower has not signed and will not sign any note or other promise to repay it.
The funds come from the source stated above. They have not been and will not be provided or reimbursed, directly or indirectly, by the seller, a builder, a real estate agent or broker, or any other person or entity with an interest in the sale of the Property, and Borrower is not obligated to repay any loan Donor may have taken out to make the gift.
Donor will give Lender any documents Lender reasonably requests to verify the gift and its transfer, such as account statements, a withdrawal record or a wire confirmation.
Donor and Borrower understand that Lender will rely on this letter in deciding whether to make the loan, and that knowingly making a false statement to influence a mortgage lender is a federal crime (18 U.S.C. § 1014).
DONOR: Robert Hayes and Linda Hayes
______________________________
Donor (signature and printed name)
Date: ____________________
______________________________
Donor (signature and printed name)
Date: ____________________
BORROWER: Emily Park and Daniel Park
Borrower confirms that the gift described above does not have to be repaid and that the statements in this letter are true.
______________________________
Borrower (signature and printed name)
Date: ____________________
______________________________
Borrower (signature and printed name)
Date: ____________________
What it's for
When part of a down payment or closing costs comes from a gift, the lender has to make sure the money is not a disguised loan that adds to the borrower’s debts. A gift letter is the donor’s signed statement of the gift: the amount, the donor’s name, address, telephone number and relationship to the borrower, and that no repayment is expected. Lenders pair it with proof of the transfer — the donor’s bank statement or withdrawal, the borrower’s deposit, or a wire to the closing agent.
The rules come from the loan program. Fannie Mae accepts gifts from relatives and from people with a family-like relationship to the borrower, and requires a gift letter signed by the donor with the elements above (Selling Guide B3-4.3-04). FHA loans also accept gifts from the borrower’s employer or labor union, a close friend with a documented interest in the borrower, a charitable organization or a government homeownership program, and require the letter to be signed and dated by both the donor and the borrower (HUD Handbook 4000.1). The builder, a real estate agent or anyone else with an interest in the transaction cannot be the donor. Many lenders have their own form, so check with yours; this template covers the elements the major programs ask for, with signature lines for the donor and the borrower.
The sample is filled in for parents giving their daughter and son-in-law part of the down payment on a house in Ohio, wired to the title agency before closing. Each gift letter keeps its own donor and amount, so a second gift for the same purchase gets a letter of its own.
What it should include
- the donor’s full name, address and telephone number
- the borrower’s name and the donor’s relationship to the borrower
- the dollar amount of the gift and when it is transferred
- the address of the property being purchased
- a statement that no repayment is expected or required
- the source of the funds and how they reach the borrower or the closing agent
- a statement that no party to the sale provided the funds
- the signatures of the donor and the borrower, with dates
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Frequently asked questions
Who can give a gift for a mortgage down payment?
It depends on the loan program. For a conventional loan sold to Fannie Mae, the donor must be a relative — related to the borrower by blood, marriage, adoption or legal guardianship — or someone with a family-like relationship: a fiancé or fiancée, a domestic partner, a former relative, or a person with a long-standing familial-like or mentorship relationship with the borrower. FHA loans also accept gifts from the borrower’s employer or labor union, a close friend with a clearly documented interest in the borrower, a charitable organization, or a government agency or public entity with a homeownership program. Under every program, the builder, a real estate agent or anyone else with an interest in the transaction cannot be the donor; a seller can give only in narrow cases, such as a relative selling the home to the borrower.
What documents does the lender need besides the gift letter?
Proof that the money moved from the donor to the borrower or the closing agent. Typically that is a copy of the donor’s check and the borrower’s deposit slip, the donor’s withdrawal slip and the borrower’s deposit slip, a record of an electronic transfer to the borrower’s account or to the closing agent, a copy of the donor’s check to the closing agent, or a settlement statement showing the gift received. Lenders may also ask for the donor’s bank statement showing the funds before they were withdrawn, especially for a large deposit. Keep the money in traceable accounts — cash is hard to document.
Does the donor or the borrower have to pay tax on the gift?
The borrower never pays tax on a gift. The donor files a federal gift tax return (Form 709) only if gifts to one person in a year exceed the annual exclusion — $19,000 per recipient in 2026 — and even then usually owes no tax, because the excess only reduces the donor’s lifetime exemption, which is $15 million per person in 2026. Spouses can elect to split their gifts, which lets a couple give up to $38,000 per recipient in 2026 without using any exemption — but the election itself is made on Form 709. A gift to a married couple counts as a gift to each spouse. Ask a tax advisor about larger gifts.
Can a gift cover the entire down payment?
Often, yes. FHA allows the full 3.5% minimum down payment to come from an acceptable gift. Fannie Mae allows a gift to cover the entire down payment and closing costs on a one-unit principal residence; for a two- to four-unit principal residence or a second home with a loan-to-value ratio above 80%, the borrower must contribute at least 5% from their own funds. Gifts are not allowed for investment properties under Fannie Mae’s rules. Lenders may add their own requirements, so confirm with yours before the money moves.
This template is a general starting point. Draftmill is not a law firm and does not provide legal advice; using a template creates no attorney–client relationship, and we do not guarantee that it is correct or suitable for your situation. Laws differ from state to state — adapt it to your situation, and have important contracts reviewed by an attorney licensed in your state. Terms of Service
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