Gift Letters: What Every Homebuyer Should Know
Sabeena Bubber • June 17, 2026
Receiving down payment help from family? Here's how to accept it wisely.
What is a gift letter?
When family members help with your down payment, your lender requires a signed gift letter confirming the money is a true gift - with no expectation of repayment. This is a standard mortgage requirement: lenders need to know the funds aren't a hidden loan that would affect your ability to carry the mortgage.
Who should the gift be made to?
If you're buying with a partner or spouse, the gift letter should name you alone as the recipient - not both of you. This one detail matters more than most people realize. If the relationship ever ends, a gift made to you individually is much easier to trace back to your family than one made to the couple jointly. It costs nothing to do it this way, and it protects you.
When should you consider a side agreement?
If the gift is substantial, consider having a family lawyer prepare a short, separate agreement that answers one question clearly: in the event of death or divorce, is there an expectation that the funds return to the family?
Here's why it matters:
- Courts treat a gift as a gift. If your parents later say the money was meant to be repaid, but nothing was put in writing, courts are increasingly unwilling to treat it as a loan after the fact.
- Memories differ when relationships end. A clear written record - made while everyone agrees - can keep your family out of expensive litigation.
- It doesn't affect your mortgage. For your lender, the funds are a gift, full stop. The side agreement is a separate family matter handled by your lawyer.
The bottom line
No one expects to die or get divorced when they're buying a home together - which is exactly why the best time to put intentions in writing is before the funds change hands. Two simple steps: have the gift made to you alone, and if the amount is significant, talk to a family lawyer about a side agreement.
This information is general in nature and is not legal advice. Please consult a family lawyer about your specific situation.
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