Using Gift Money for Your Down Payment

Gift-giving season is upon us — and did you know that you can potentially use gift money to help cover your down payment?

You most certainly can. However, there are some limitations and a few bases you’ll need to cover so your gift money is properly accounted for. Here are a few things to know:

Amount

There’s no maximum dollar amount of gift money that can go toward your down payment. But there might be a minimum borrower contribution depending on your loan, so we’ll double-check whether this applies to you.

Source

You’ll need to provide proof of where your gift money came from. If possible, ask the donor to gift it in a manner that has a paper trail, e.g., a bank transfer or check.

If you receive a check, it’s best to deposit it in person so you can obtain a receipt. Make sure your gift money is deposited into the account you’ll be using for your mortgage.

Who

There are certain rules for who can give you money toward your down payment, but they differ depending on your loan type.

Typically, any immediate family member, spouse or fiance is acceptable. Reach out if you’re unsure who can contribute gift money toward your loan.

Letter

A gift letter provides more information on the donor as well as written confirmation that they do not intend for you to pay the money back. Your letter should include key information such as:

• Their name(s), address and contact information.
• Their relationship to you.
• Exact dollar amount.
• The date it was gifted or transferred.

Signed confirmation that the money given does not need to be repaid.

Have questions about the right way to use gift money for your down payment? Let’s chat.

About the Author

Kevin Oto

Mortgage Broker/ President at Green Haven Capital Inc. · NMLS #62641

With over 20 years of experience, Kevin has established himself as one of Northern California’s most trusted mortgage advisors — helping homebuyers, homeowners, and real estate investors secure financing with clarity, confidence, and competitive pricing in any market.

Specializes in: Conventional loans, Purchase loans, Investment property financing

Licensed in: CA, CO, MD, OR, TN, TX, UT

→ Contact → (916) 476-6507 → Verify NMLS license