Gift Funds for a Down Payment (2026 Rules)

Official, in effect Conventional (Fannie Mae)

Who can give: a relative (by blood, marriage, adoption or legal guardianship) or a non-relative with a family-like relationship, such as a domestic partner, fiancé(e), former relative, or someone with a long-standing family-like or mentorship relationship. The donor can't be, or be affiliated with, the builder, developer, real estate agent or any other interested party.

Occupancy: gifts are allowed on a principal residence or second home, not on an investment property.

How much must be yours: at 80% LTV or less, the whole amount can be a gift. Above 80% LTV, a 1-unit principal residence also needs no minimum from your own funds. A 2-4 unit principal residence or a second home needs 5% from your own funds first.

Gift letter: signed by the donor. It must state the actual or maximum dollar amount, say no repayment is expected, and give the donor's name, address, phone number and relationship to you.

Source: Fannie Mae Selling Guide B3-4.3-04, Personal Gifts (02/04/2026) · Checked Nov 8, 2026

Official, in effect FHA

Who can give: a family member, your employer or labor union, a close friend with a clearly defined and documented interest in you, a charitable organization, or a government agency or public entity with a homeownership program for low- or moderate-income families or first-time buyers. The donor can't use cash on hand.

Your 3.5% minimum investment can't come from the seller, anyone who benefits from the sale, or anyone reimbursed by them.

Gift letter: signed and dated by both the donor and you. It must include the donor's name, address and phone number, their relationship to you, the dollar amount, and a statement that no repayment is required. The lender must also document how the money moved from the donor to you or the closing agent.

Sources: HUD Handbook 4000.1 (Update 18, Aug 12, 2026) · HUD: Handbook 4000.1 information page · Checked Nov 8, 2026

Official, in effect USDA guaranteed

USDA's July 2024 handbook update says gift funds don't have to go into your bank account first. They can go straight to the title company if the lender keeps the gift letter plus the Closing Disclosure showing receipt of the donor's funds, or a copy of the check or electronic transfer.

For who can give and the rest of the gift rules, ask your lender to show you Chapter 9 of USDA's guaranteed-loan handbook (HB-1-3555). We couldn't load the current chapter from USDA's site tonight, so we don't list those details here.

Source: USDA RD: Handbook update highlights (July 2024) · Checked Nov 8, 2026

VA

VA allows documented gift funds, and the rules are in Chapter 4 of VA's Lender's Handbook (VA Pamphlet 26-7). We couldn't load that chapter from VA's official site tonight, so check the donor and gift-letter rules with your VA lender. Note: VA counts any "gifts" the seller gives you toward its 4% seller-concession limit. See seller concessions.

Source: VA lender training: Borrower fees and charges · Checked Nov 8, 2026

Gift checklist

• Tell your loan officer about the gift early, before any money moves.
• Have the donor sign the gift letter your lender provides.
• Keep a paper trail: the donor's withdrawal, the transfer, and your deposit (or proof the closing agent got it).
• Don't deposit a gift in cash. Most programs can't accept cash you can't trace.
• Buying a rental? Conventional loans don't allow gifts on investment properties.

Related tools and pages

Seller concessions by loan type · FHA vs conventional (2026) · VA vs conventional (2026) · USDA rural loans · Credit score and DTI changes · Cash flow calculator