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Conventional loans · Fannie Mae B3-4.3-04Down payment gift letter: who can give, what it must say and how the money moves

On a Fannie Mae conventional loan for a principal residence or second home, gift funds can pay all or part of the down payment, closing costs or financial reserves; gifts are not allowed on an investment property. The donor must be a relative – spouse, child, other dependent, or anyone related by blood, marriage, adoption or legal guardianship – or a non-relative with a familial relationship, such as a domestic partner, fiancé(e), former relative or a long-standing familial-like or mentorship relationship. The donor cannot be, or be affiliated with, the builder, developer, real estate agent or any other interested party. The gift letter, signed by the donor, must state the actual or maximum amount, that no repayment is expected, and the donor's name, address, telephone number and relationship to the borrower. The lender must also see the money: in the donor's account, transferred to the borrower, or delivered to the closing agent by wire, certified or cashier's check.

What the gift letter must include

  1. 1. Amount

    The actual or the maximum dollar amount of the gift.

  2. 2. No repayment

    The donor's statement that no repayment is expected.

  3. 3. Donor details

    Name, address and telephone number.

  4. 4. Relationship

    How the donor is related to the borrower.

  5. 5. Signature

    Signed by the donor; a gift from a trust or estate also names the trust or estate account.

When the buyer must put in their own money

  1. LTV 80% or less

    No minimum contribution: everything can come from a gift (1–4 unit principal residence or second home).

  2. Over 80%, one unit

    No minimum contribution for a one-unit principal residence.

  3. Over 80%, 2–4 units or second home

    5% from the borrower's own funds first; then gifts can add to it.

  4. Donor lives with the buyer

    A gift from a donor who has lived with the borrower for 12 months counts as the borrower's own funds if both will live in the home – with a certification and proof of shared address.

Proof of the money – one of these

  • The donor's check and the borrower's deposit slip, or the donor's withdrawal slip and the borrower's deposit slip.
  • Evidence of an electronic transfer from the donor's account to the borrower or to the closing agent.
  • The donor's check to the closing agent, or a settlement statement showing it was received.
  • If not transferred before settlement: proof the donor gave the closing agent the funds by wire, certified, cashier's or other official check.

Questions buyers and agents ask

Who can give a down payment gift on a Fannie Mae loan?

A relative, or a non-relative with a familial relationship such as a domestic partner, fiancé(e) or long-standing mentor – never the agent, builder, developer or another interested party (Fannie Mae Selling Guide B3-4.3-04).

What must a gift letter say?

The actual or maximum amount, that no repayment is expected, and the donor's name, address, telephone number and relationship to the borrower, signed by the donor.

Can gift money be used on an investment property?

No. Fannie Mae allows gifts for a principal residence or second home, not an investment property.

Related guides

Request the gift letter and the transfer proof in ClosingCode with an upload link in the donor's language – English or Spanish – and see when each arrives.

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Source: Fannie Mae Selling Guide B3-4.3-04, Personal Gifts (02/04/2026), selling-guide.fanniemae.com, read October 25, 2026.

General information about Fannie Mae conventional loans, not legal or financial advice. FHA, VA, USDA and other investors have their own gift rules, and a lender can add more. ClosingCode is software; it is not a lender. This guide is not a substitute for the advice or services of an attorney.