# Gift letter

> A gift letter is a signed statement from a donor confirming money for your home purchase is a gift, not a loan. What it must include and who can give.

URL: https://mail.mortgage-math-us.com/glossary/gift-letter/  
Last reviewed: 2026-10-29 · By the MortgageMath US Editorial team

## Quick answer

A **gift letter** is a signed statement from someone giving you money toward a home purchase, confirming the amount and that you don’t have to repay it. Lenders require it so the money is treated as your own funds, not as a hidden loan that would count against your [debt-to-income ratio](https://mail.mortgage-math-us.com/glossary/debt-to-income-ratio/).

## Key facts

| Fact | Value | Source | As of |
|---|---|---|---|
| Own funds required first, 2–4 units or second home above 80% LTV | 5% | [Fannie Mae Selling Guide B3-4.3-04](https://selling-guide.fanniemae.com/sel/b3-4.3-04/personal-gifts) | Feb 4, 2026 |
| Annual gift tax exclusion per recipient | $19,000 | [IRS: What's new — Estate and gift tax](https://www.irs.gov/businesses/small-businesses-self-employed/whats-new-estate-and-gift-tax) | Tax year 2026 |

## What the letter must include

For a Fannie Mae loan, the donor signs a letter that:

- states the actual or maximum dollar amount of the gift;
- says no repayment is expected;
- gives the donor’s name, address, phone number and relationship to you.

The lender also documents the transfer, for example with a copy of the donor’s check and your deposit slip, a wire record, or the donor’s check to the closing agent. Acceptable donors include relatives, a domestic partner, a fiancé or fiancée, and people with a long-standing family-like relationship to you. No one with a stake in the sale, such as the builder or a real estate agent, can be a donor.

## How much a gift can cover

On a one-unit home you’ll live in, a gift can cover the whole [down payment](https://mail.mortgage-math-us.com/glossary/down-payment/), closing costs and [reserves](https://mail.mortgage-math-us.com/glossary/reserves/). On a two- to four-unit home or a second home with more than 80% LTV, you must first put in 5% from your own funds, and gifts aren’t allowed on investment property. On taxes, the donor, not you, files a gift tax return only when gifts to one person top $19,000 in a year, and tax is generally owed only after their lifetime exemption is used up. More in the [down payment guide](https://mail.mortgage-math-us.com/buying/down-payment/).

## Sources

- [Fannie Mae Selling Guide B3-4.3-04](https://selling-guide.fanniemae.com/sel/b3-4.3-04/personal-gifts) — Fannie Mae: own funds required above 80% LTV on a two- to four-unit principal residence or second home (Feb 4, 2026)
- [IRS: What's new — Estate and gift tax](https://www.irs.gov/businesses/small-businesses-self-employed/whats-new-estate-and-gift-tax) — Annual gift tax exclusion per recipient (2026) (Tax year 2026)
- [CFPB: Where can I get money for a down payment on a home?](https://www.consumerfinance.gov/ask-cfpb/where-can-i-get-money-for-a-down-payment-on-a-home-en-123/)

_General information, not financial advice._