Gift Funds: Documentation Requirements by Loan Program
Gift funds from family members, employers, or non-profits can be used for down payment and closing costs, but require specific documentation to satisfy lender requirements.
What the Lender Requires
- Gift letter (lender-specific form or signed statement)
- Donor bank statement showing sufficient funds before transfer
- Transfer documentation (wire confirmation, cashier's check, or deposit to borrower account)
- Borrower bank statement showing receipt
- Donor relationship documentation if non-family donor
How CTC Processes Gift Funds Documentation for Mortgages Files
- 01Borrower discloses gift funds
- 02CTC orders gift letter from donor
- 03Obtain donor bank statement
- 04Confirm transfer
- 05Verify receipt in borrower account
- 06Document in file
Common Conditions Related to Gift Funds Documentation for Mortgages
- Evidence of donor ability to give (bank statement showing amount was available before transfer)
- Wire or cashier's check confirmation
- For large gifts: additional sourcing of donor funds may be required
- Employer gift letter on company letterhead if from employer
How CTC Handles Gift Funds Documentation for Mortgages
Gift fund documentation is frequently incomplete at initial submission. CTC identifies gift fund requirements on intake and works with borrowers to collect all documentation before the file goes to underwriting.
Frequently Asked Questions
Who can give a mortgage gift?
Conventional: immediate family members. FHA: wider — family, fiancé, employer, charitable org, government agency. VA: no restrictions. USDA: family only.
Can gift funds cover closing costs?
Yes — gift funds can cover closing costs in addition to or instead of down payment, for all loan programs.
What is a gift letter?
A signed statement from the donor confirming: amount, relationship, that funds are a gift not a loan, and no expectation of repayment. CTC provides a template and reviews every gift letter before submission.