Common Questions About Mortgage Down Payment Gifts

February 18, 2020 by Dan Green

Can my parents give me a cash down payment for a home?

Yes, home buyers can receive cash gifts for down payment from a parent and any other relative by blood, marriage, adoption, domestic partnership, or legal guardianship.

Can my grandparents gift me a cash down payment for a home?

Yes, home buyers can receive cash gifts for down payment from a grandparent or any other relative by blood, marriage, adoption, domestic partnership, or legal guardianship.

Can my girlfriend or boyfriend gift me a down payment for a home?

Yes, home buyers can receive a down payment gift from a girlfriend or a boyfriend, but at the lender’s discretion. Home buyers should expect to document their relationship with a paper trail or photographs.

Can my fiancé(e) give me a gift down payment for our future home?

Yes, home buyers can receive cash gifts from a fiancé(e) to be used for the purchase of a home. Lenders may request evidence of an engagement to document the relationship.

Can the seller gift me cash for a down payment on a home?

No, home buyers cannot accept cash from the home seller to use for a down payment.

Who can gift me money for a mortgage down payment?

You can receive a cash gift from just about anybody for use as down payment on a home. The notable exceptions are your real estate agent, the seller’s real estate agent, your mortgage lender, the seller of the home, and anyone else who gets paid because you’ve purchased a home.

How much money can be gifted for a down payment?

There is no limit to how much money a home buyer can receive as a gift for down payment.

How long does a cash down payment gift have to be in my bank account?

There is no specific requirement for how long gift money must be in a home buyer’s bank account before closing on a home. Gift money that’s in a bank account for less than 60 days before a closing may be subject to additional paper verifications.

Can I get a cash gift for down payment “at the last minute”?

Yes, you can get a last-minute cash gift for down payment on a home. With last-minute cash gifts, to alleviate timing issues, it’s best to send the money via wire transfer to your closing in advance, with reference to the buyer and the property.

Can a home buyer get a loan for a down payment?

No, as a general rule, home buyers cannot borrow money and use it for a down payment. This includes borrowing money from a family member or friend; from a credit card; and, from a non-profit organization. Borrowing from a 401(k) plan to make a down payment is allowed.

What does a good mortgage gift letter look like?

A proper mortgage gift letter includes the following:

  • The gift giver’s name, address, and contact information
  • The home buyer’s name and relationship to the donor
  • The dollar amount and approximate date of the gift
  • A statement that the gift requires no repayment whatsoever
  • Signatures of the gift giver(s) and the home buyer

You don’t need an attorney to write your mortgage gift letter. That would be overkill. You can write the letter yourself.

Can I apply my real estate agent’s commission as a cash gift for down payment?

No, home buyers may not use their real estate agent’s Commission as a cash gift for down payment on a home.

Do I have to pay taxes on a cash down payment gift?

According to U.S. tax code, the giver of a cash gift for down payment pays the related taxes, when applicable. The receiver of the gift pays no taxes on the gift whatsoever. As with all tax questions, though, consult with your accountant for relevant, personalized advice.

How do I document a cash down payment gift for a house?

To document a down payment gift for a home, do these three things:

  1. Write a mortgage down payment gift letter that includes a dollar figure
  2. Provide a copy of the gift giver’s check or withdrawal slip for the same dollar figure
  3. Show the gift recipient’s deposit slip with the same dollar figure

Then, deliver each of the above to your mortgage lender by hand or digitally — whichever is easier.

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