🧧Gift Funds — The Best Gift You’ll Ever Get as an Adult

🎁 Remember when you were a kid and birthdays or holidays meant the best surprises? Maybe it was a new bike, a Barbie Dreamhouse (with the pool and elevator, obviously), or even a puppy. Family members always seemed to know exactly how to make the moment magical.

Well…that doesn’t have to stop just because you’re an adult. Family can still give one of the greatest gifts of all: helping you with one of the biggest purchases of your lifetime—a new home.

💖Family Gifts Don’t End at Childhood

Saving for a down payment or closing costs is often one of the biggest hurdles to homeownership—especially for first-time buyers.

But here’s something many people don’t realize:

Gift funds can help bridge the gap.

Instead of waiting years to save every dollar yourself, qualified gift funds can allow you to move forward sooner, with the support of family or other approved donors.

📝 Do Gift Funds Need to Be Documented?

Yes—gift funds come with mandatory documentation requirements.

Sounds official (and it is), but don’t worry: I guide buyers through this step-by-step.

Typically, the process includes:

• The donor transfers the funds to the buyer’s account (or directly to escrow)

• The buyer provides proof of deposit in their bank statement

• The donor provides a bank statement showing the withdrawal

• A signed gift letter confirms the money is truly a gift with no repayment required

If electronic transfers can’t be verified, acceptable proof may include:

• Cashier’s check

• Certified check

• Money order

• Wire confirmation

Some loan programs may also require the donor to prove they had the ability to give the gift.

✅ Which Loans Work Best With Gift Funds?

Gift funds are most commonly used with:

• Conventional loans

• FHA loans

• VA loans (in some cases)

Because these loan programs often require buyers to bring funds to closing, gift funds can be a huge help.

Every loan product has different rules, so it’s important to work with a lender who can guide you to the best fit.

👨‍👩‍👧 Who Can Gift the Funds?

Gift donor rules depend on the loan type:

Conventional Loans

Generally allowed donors include family members by:

• Blood

• Marriage

• Adoption

• Legal guardianship

This includes:

• Parents

• Grandparents

• Siblings

• Spouses

• Domestic partners

• Fiancés

FHA Loans (More Flexible)

FHA also allows gift funds from:

• Close friends with a documented long-term relationship

• Employers or labor unions

• Charitable organizations

• Government or public homeownership assistance programs

⚠️ Are There Any Stipulations?

Yes—there are a few important rules:

• 🚫 Gift funds cannot be given as cash (cash can’t be traced)

• Donors can borrow the money as long as it’s not from someone involved in the transaction

  • Not the seller

  • Not the builder

  • Not the realtor

  • Not the lender

Gift of Equity Option

If you’re buying from a family member, a gift of equity may be possible, where the seller gifts part of the home’s value to reduce the buyer’s needed cash.

Minimum Buyer Contribution

Some loan types require the buyer to contribute a portion of their own funds.

Reserves

Gift funds generally cannot be used to meet reserve requirements.

Investment Properties

Gift funds are typically allowed for:

• Primary residences

• Second homes

But not for investment properties.

🚀 Getting Started With Gift Funds

Buying a home is a big move—and the upfront cost is one of the main reasons buyers delay taking the first step.

But you may have more options than you think.

With help from family, approved donors, or down payment assistance programs, you could be much closer to homeownership than you ever imagined.

If you’re considering using gift funds, let’s talk early so we can structure everything correctly and keep your closing smooth.