Imagine telling your 5-year-old self how excited you are that someone is gifting you funds for a mortgage. 🤪
Gift funds are one of those things you never thought you’d get excited about… But here we are.
In this post, we’re breaking down some of the most common questions around gift funds and home buying. Every situation is different, but our goal is to help make things clearer so you can feel more confident moving forward.
Question: What is a gift fund in mortgages?
Answer:
Gift funds are money someone else gives you for the purpose of helping you buy a home. That someone must fit into a specific criteria, but we’ll talk about that next.
Here’s the big thing to remember: gift funds are not loans. That means the person giving you the money cannot expect to be repaid, now or in the future. You must clearly document this, typically with a signed gift letter confirming that there’s no repayment involved.
Question: Who can gift funds for a mortgage?
Answer:
So, can anyone help you with a gift fund? Not exactly.
There are specific guidelines around who can give a financial gift, and it all depends on the type of loan you’re using (FHA, VA, Conventional, USDA).
These guidelines generally include, family members, fiancés/domestic partners, close friends, and employers.
Every loan program is a little different, so the list of who’s eligible to give a gift can expand or tighten depending on the criteria of that specific loan.
Question: How much can a gift be for a mortgage?
Answer:
Technically, there’s not set limit on how much someone can gift you. As long as it meet the program guidelines and is properly documented.
But, there are two things to keep in mind:
1. Remember how we said each loan type has different criteria for eligible donors? Each loan type has different rules for funding as well. Some loans let gift funds cover the entire down payment and closing costs, but others require you to use some of your own funds too. It just depends on the loan type.
2. As of 2025, someone can gift up to $18,000 without needing to file a gift tax form (called IRS Form 709). If they give more than that, they may need to file the form. That doesn’t usually mean they will owe taxes, the IRS just tracks it as part of their lifetime gift allowance.
As you can see, everyone’s scenario can be a little different, so if you’re thinking of using gift funds, it’s a good idea to get connected with a loan officer so they can provide customized feedback.
No pressure, we’re just real people who care about helping you make an informed, confident decision for
homeownership.