Gift Letter Calculator
See how much of your down payment can come from a gift, who can give it, and exactly what documentation your lender will require. Includes a gift letter template and 2026 gift tax thresholds.
Enter your loan program, gift amount, and donor relationship to see how much gift money is allowed and what documentation you need.
Each loan program has specific rules about how much of the down payment can come from gift funds.
| Program | Max Gift % | Borrower Min | Key Conditions |
|---|---|---|---|
| Conventional (1-unit primary) | 100% | 0% if 20%+ down; 5% if down <20% | Must be family member; investment properties excluded |
| Conventional (2-4 unit primary) | 100% if 20%+ down | 5% borrower if down <20% | At least 5% must be borrower own funds unless 20%+ down |
| FHA | 100% | 0% | Eligible donors: family, employer, govt, charitable org, close friend (no interest in transaction) |
| VA | 100% | 0% | Any donor. No VA downpayment required. Gift can cover funding fee as well. |
| USDA | 100% | 0% | Family members only. No commercial gifts. Closing costs also can be gifted. |
| Jumbo | Varies (often 0–10%) | 90–100% borrower | Most Jumbo lenders require majority or all borrower funds. Check lender guidelines. |
A gift letter must contain specific language. Missing any element can delay or kill your loan approval.
Date: [Date of Transfer]
This letter confirms that I/we, [Donor Full Name], residing at [Donor Street Address, City, State, ZIP], have given/will give a monetary gift of $20,000 to [Recipient Full Name] for use toward the purchase of property located at [Property Address].
The gift funds are from the following source: [Describe: checking account, savings account, sale of stock, etc.]
This gift is not a loan, and no repayment is required or expected, either express or implied. The donor has no interest in the subject property and will not benefit from this real estate transaction.
The relationship between the donor and recipient is: parent.
How to Use the Gift Letter Calculator
Select your loan program, property type, and the donor's relationship to you. Enter the home price, down payment percentage, and gift amount. The calculator instantly shows how much of your down payment can come from gift funds, whether your donor is eligible under program rules, and exactly what documentation you and your donor need to provide.
Use the Advanced tier to compare program-by-program rules, review donor eligibility for each program, and understand the seasoning rule (when gift funds become treated as your own). The Pro tier includes a complete gift letter template, audit trail requirements, and 2026 gift tax thresholds.
Gift Fund Rules by Program
The key rule differences between programs:
- FHA (most flexible): 100% of down payment may be a gift. Eligible donors include parents, siblings, grandparents, in-laws, employers, approved charitable organizations, and government programs. Even close friends with no financial interest in the transaction qualify. FHA is ideal for first-time buyers relying on family help.
- VA (also 100%): Any donor is acceptable on VA loans. VA also uniquely allows gift funds to count as cash reserves, which no other program does.
- USDA (100% from family): Only family members qualify as donors. No gifts from employers, charities, or non-family sources.
- Conventional (conditions apply): With 20%+ down payment, 100% of funds may be a gift from an eligible relative. With less than 20% down, the borrower must contribute at least 5% from their own funds. Investment properties cannot use any gift funds.
The Seasoning Shortcut
The simplest way to handle gift funds: deposit the gift money into your bank account at least 90 days before applying for the mortgage. Funds that appear in two or three consecutive months of bank statements are considered "seasoned" — lenders treat them as the borrower's own money, requiring no gift letter and no donor documentation.
Apply for Mortgage: Day 90+
Result: No gift letter required — funds are "seasoned"
Alternative: Gift received close to closing
Result: Full audit trail required (gift letter + donor bank statements + transfer proof)
Example: First-Time Buyer Using a Family Gift
Scenario: Emily buying a $350,000 home with FHA loan
| Purchase Price | $350,000 |
| FHA Minimum Down (3.5%) | $12,250 |
| Gift from Parents | $12,250 (100% of down payment) |
| Borrower Own Funds Needed | $0 (FHA allows 100% gift) |
| Gift Letter Required? | Yes — signed by Emily and parents |
| Donor Documents | Parents' 2 months bank statements |
| Transfer Proof | Wire confirmation + Emily's bank statement showing deposit |
Emily can use 100% of her down payment as a gift from her parents for an FHA loan. For Conventional at 3.5% down, she would need to contribute 5% ($17,500) herself — more than the total down payment — making FHA the better choice for her situation.