FHA is one of the most flexible programs for gift funds — up to 100% of your down payment and closing costs. But the paper trail has to be airtight. Here's exactly what's required.
A donor can gift up to 100% of your required down payment and closing costs.
Donor's ability to give, the instrument itself, and your receipt of the funds — all documented.
Must state donor info, exact amount, relationship, and that no repayment is expected.
Sellers, agents, or anyone financially benefiting from the sale cannot gift funds.
Getting help from parents or family to cover a down payment and closing costs.
You received money as a gift and need it properly documented before it can be used.
Combining gifts from more than one relative — each needs its own letter and paper trail.
These are the FHA (HUD 4000.1) rules I underwrite to. Conventional, VA, USDA, and Non-QM treat some of these situations differently — see below.
| Requirement | Detail |
|---|---|
| Acceptable donors | Immediate family, employers, close friends with a clearly defined relationship, or humanitarian/non-profit orgs |
| Not acceptable | Sellers, real estate agents, or any party with a financial interest in the transaction |
| Max gift amount | Up to 100% of your required down payment + closing costs |
| Gift letter must include | Donor name, address, phone, relationship, exact dollar amount, and a statement that no repayment is expected |
| Paper trail — donor | Copy of the donor's bank statement or wire receipt showing funds leaving their account |
| Paper trail — instrument | Copy of the check, wire confirmation, or bank check |
| Paper trail — borrower | Your bank statement showing the funds fully deposited and cleared |
Non-QM investors aren't standardized by Fannie, Freddie, or FHA, so guidelines vary — here's the general shape I see most often.
| Requirement | Typical Non-QM rule |
|---|---|
| Acceptable donors | Relative, spouse, domestic partner, or close friend with a clearly documented relationship |
| Documentation | Fully executed gift letter, donor's bank statement showing the withdrawal, and proof of deposit |
| The catch | On bank-statement or investment-property Non-QM loans, you may still need to contribute 5% of your own funds even when using gifts |
VA is the most flexible — no minimum borrower contribution, and no immediate-family restriction on donors.
| Requirement | VA rule |
|---|---|
| Acceptable donors | Relative, close friend, or eligible organization — no immediate-family restriction |
| Minimum borrower contribution | None — 100% of funds needed to close can come from a gift |
| Documentation | VA Gift Letter, plus proof of the donor's check/deposit slip and cleared funds — a full donor bank statement generally isn't required |
Conventional matches FHA's 100% gift allowance for primary residences, with a standard paper trail.
| Requirement | Conventional rule |
|---|---|
| Max gift amount | 100% of down payment and closing costs on a primary residence |
| Documentation | Signed Gift Letter (no repayment expected) plus a paper trail showing funds leaving the donor's account and landing in yours |
USDA allows gifts toward reserves too, not just down payment and closing costs.
| Requirement | USDA rule |
|---|---|
| Uses allowed | Down payment, closing costs, or reserves |
| Acceptable donors | A relative or close family friend with a documented relationship — not any interested party to the transaction |
| Documentation | Signed gift letter, proof of donor's ability to give, and proof of receipt (deposit slip + cleared bank statement) |
SONYMA has a catch — gifts can't replace your own required contribution.
| Requirement | SONYMA rule |
|---|---|
| Own-funds rule | Gifts cannot satisfy your minimum personal contribution — you must still contribute 1% (1-family) or 3% (2-4 family) from your own seasoned funds |
| After that | Gifts can cover the rest of the down payment, with a standard gift letter and paper trail (donor's check, deposit slip, cleared funds) |
Jumbo aggregators are the strictest of any program on gift funds — some require a minimum own-funds contribution first.
| Requirement | Jumbo rule |
|---|---|
| Own-funds requirement | Some investors require 5% from your own liquid assets before gift funds can be applied — always check the specific matrix |
| Non-relative donors | A "close, family-like ties" gift requires a signed Letter of Explanation from the borrower or donor detailing the relationship |
| Gift of equity | No cash back allowed if the specific investor permits it — usable strictly for down payment and closing costs |
Land loans exclude cash-on-hand and crypto as gift sources — stricter than most other programs.
| Requirement | Land Loan rule |
|---|---|
| Allowable donors | A relative with close family ties, or an employer/labor union — not any interested party to the transaction |
| Unacceptable sources | Cash on hand, cryptocurrency, or down payment assistance programs |
| Paper trail | Donor's bank statement showing the withdrawal plus proof of deposit, or a cashier's check/wire plus proof the donor had the funds available |
Licensed across New York State — with deep roots in the Capital Region and select NYC neighborhoods.
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