Gift for down payment on home purchase


where and who can get a gift for a down payment on a home and will most banks accept them and can the seller be the one to give you the gift, if not related to the buyer

david ingram replies:

Anyone can give you a gift for a down payment.  If they do, it is common to get a "gifting" letter from them to the bank.  This letter would state that the money is a gift and they do not expect any repaymnet or services in return and that you do not owe the giver anytjhing in the future.  i.e., it is a gift, pure and simple. Gifts of this kind almost always come from Parents, Aunts, uncles, grandparents or other blood relatives or very close family friends.

The question of whether it can come from the seller is interesting.

In reality, it would usually mean that a non-related seller had merely reduced the price of the unit unless they fell into the very close family friend..

A banker might accept the concept if there was a very high appraisal from a very qualified appraiser and give the loan bassed upon the equity you would have.

i.e. the house is appraised at $250,000 and you are getting it for $200,000 and there is a perceived $50,000 equity..

In a falling market though, a bank is not likley to like the idea if it is a non-related or close friend gift..

Remember, that if the gift exceeds $12,000 per person, there is gift tax involved.  However, parents could each give $24,000 a year if there is a daughter and son in law because mom can give $12,000 to each o fthem and dad can give $12,000 to each of them with no gift tax.