Gift funds
Money a buyer receives from a family member to help with down payment or closing costs. Most loans allow gift funds with a signed letter confirming it's not a loan.
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See how it worksWhere this comes up: on the market
Part 1 of 4
Why a seller cares
A buyer using family money for their down payment is common, and lenders allow it with a signed gift letter. It only becomes your problem if the letter is missing at underwriting and the closing slips.
Part 2 of 4
A simple example
The buyer's parents give $20,000 toward the down payment. The lender wants a gift letter, a copy of the check, and the parents' bank statement.
| What the lender asks for | Why |
|---|---|
| A signed gift letter | To confirm it is not a loan the buyer has to repay |
| Proof the money moved | To trace it into the buyer's account |
| Any of these missing at closing | A delay, which is where it touches your sale |
Gift money is fine with a paper trail. The paper trail is what takes time.
Part 3 of 4
What people get wrong
That a gift makes the buyer's financing shaky. A documented gift is ordinary; an undocumented one is a delay.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
In your Room, this word explains itself where it appears.
Your Room defines gift funds in the step you meet it in, beside the document or the date it belongs to. Free to set up, with an agent or on your own.
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