Yes. Family gift money is an ordinary way to fund a down payment, and on a one-unit primary residence it can fund the entire thing. The approval does not turn on the amount. It turns on who the donor is, what the gift letter says, and whether the money’s path from their account to the closing table can be traced on paper.
How much of your down payment can be gift money
Fannie Mae’s Selling Guide sets no minimum contribution from your own funds on a one-unit principal residence, at any loan-to-value ratio. All funds needed to complete the transaction can come from a gift. The limits sit elsewhere: gifts are not allowed on an investment property at all, and on a two- to four-unit principal residence or a second home above 80% loan-to-value you must put in 5% of your own money first.
FHA works from a floor instead of a ceiling. Section 203(b)(9) of the National Housing Act requires you to pay at least 3.5% of the appraised value in cash or its equivalent, and a gift from an acceptable donor can supply all of it. The same statute also counts money you borrow from a family member as cash or its equivalent, so long as any lien securing repayment stays subordinate to your mortgage. A gift and a family loan are both workable, and they are documented differently.
Who the lender will accept as the donor
Both rulebooks limit the donor, and they do not draw the line in the same place. A donor your FHA lender accepts may not clear a conventional underwriter, so settle the donor before anyone signs anything.
| Donor | Fannie Mae (conventional) | FHA |
|---|---|---|
| Parent, grandparent, sibling, child, spouse, in-law | Yes, as a relative by blood, marriage, adoption or guardianship | Yes, all named in the Family Member definition |
| Domestic partner | Yes, including a relative of the partner | Yes, named alongside spouse |
| Fiance, engaged to marry you | Yes | Not named in the Family Member definition |
| Former relative | Yes | Not named, although in-laws are |
| Close friend or mentor | Yes, if long-standing and familial-like | Yes, if the friend has a clearly defined and documented interest in you |
| Employer or labor union | Not a personal-gift donor; entity money runs under separate grant rules | Yes |
| Charity or government program | Not a personal-gift donor; handled as a grant | Yes, for low- or moderate-income or first-time buyer programs |
| Anyone who profits from your purchase | No | No |
That last row is the one that ends deals. Fannie Mae bars a donor who is, or has any affiliation with, the builder, the developer, the real estate agent or any other interested party. The FHA bar is statutory rather than discretionary and reaches past the obvious: the seller, anyone who financially benefits from the transaction, and any third party they reimburse directly or indirectly. Fannie Mae leaves one narrow opening for a seller who is independently an acceptable donor with no affiliation to another interested party, which is what makes a parent-to-child sale workable.
What the gift letter must say, and who signs it
The gift letter is a short document with required contents, and a letter missing one of them gets sent back. Fannie Mae requires the actual or maximum dollar amount, the donor’s statement that no repayment is expected, and the donor’s name, address, telephone number and relationship to you. FHA requires the same four facts, with the amount stated rather than capped, and adds a signature requirement that surprises people: the letter must be signed and dated by the donor and by you.
Read the no-repayment line literally. A side understanding that you will pay your parents back when your bonus lands contradicts the document the lender is relying on. Where repayment is genuinely intended, the family loan described above is the honest structure, and your loan officer needs to know which one you are using before underwriting begins.
How the money has to move from their account to yours
Underwriting verifies two separate things: that your donor had the money, and that the money reached you or the closing agent. Fannie Mae accepts the gift sitting in the donor’s account or already deposited in yours, and it accepts any of several paper trails, from the donor’s check paired with your deposit slip to a settlement statement showing receipt of that check. Where the funds have not moved before settlement, the donor must hand the closing agent an electronic transfer or an official check.
FHA sorts the same documentation by timing. A gift verified before settlement pairs proof the donor took the money out, by bank statement, canceled check or withdrawal receipt, with proof it landed in your account. A gift verified at settlement needs evidence of payment to the settlement agent instead.
One source is excluded outright. FHA states that cash on hand is not an acceptable source of donor gift funds, so money sitting in a safe cannot become a down payment by being deposited the week before closing. It has to live in a bank account long enough to be a bank record. That is a separate question from how and when your funds have to reach the Florida closing agent, which carries its own deadlines.
Can my parents give me money for my down payment without a tax bill?
Almost certainly, and the filing question belongs to them rather than to you. The IRS annual exclusion is $19,000 per recipient for gifts made in 2026, and each spouse gets their own, so two parents can give one child $38,000 in a calendar year with no gift tax return. A larger gift is still permitted; above the exclusion the donor files Form 709, and the IRS is explicit that the donor is generally responsible for any gift tax.
Set those figures against what a Central Florida purchase asks for. The Orlando Regional REALTOR Association recorded a median single-family sale price of $432,360 in September 2026 across 1,843 closings, with data as of October 8, 2026. FHA’s 3.5% minimum on that price is $15,132.60, which one parent’s $19,000 exclusion covers with $3,867.40 left for closing costs. A 5% contribution would be $21,618, inside the $38,000 two parents can give. Holding out for 20% would mean $86,472, which is the arithmetic that makes gifted down payments ordinary.
Before anyone transfers a dollar
- Give your loan officer the donor’s name and relationship, and confirm that donor clears the program you are using.
- Decide whether this is a gift or a family loan. The documentation diverges from that point forward.
- Sign the gift letter before the transfer, with the FHA letter signed by you as well as the donor.
- Move the money by check or electronic transfer from the donor’s own account. Skip cash, and skip routing it through a third person.
- Keep the donor’s withdrawal statement and your deposit record. Those two documents are the file.
Questions we get next
Can the seller or my real estate agent give me the down payment?
No. Fannie Mae disqualifies a donor affiliated with the builder, the developer, the real estate agent or any other interested party. The FHA prohibition sits in the statute and covers the seller, anyone who financially benefits, and any third party they reimburse. Fannie Mae’s one exception is a seller who is independently an acceptable donor with no affiliation to another interested party.
Does the gift have to be in my account before I apply?
No. Both rulebooks contemplate a gift verified in the donor’s account, a gift already deposited with you, and a gift the donor delivers to the closing agent. Timing changes which documents the lender collects, so the donor should not transfer anything until the loan officer has said what proof they need.
My grandmother wants to help but she lives with me. Does that change anything?
It can help on a conventional loan. Fannie Mae treats a gift from an acceptable donor who has lived with you for the past 12 months as your own funds for the minimum-contribution test, provided both of you will occupy the home as a principal residence. Claiming it takes a certification from the donor about the shared residency plus documents showing the same address.
Where to go from here
Two decisions come before the money moves: whether your donor clears the program you are borrowing under, and whether a gift or a family loan fits what your family actually intends. Both are questions for your loan officer, and both are cheaper to answer before a transfer than after one. Where no gift is available, down payment assistance for Florida workforce buyers reaches the same closing table, and we have written separately on what Hometown Heroes provides and what it has to be repaid against.
When you want these numbers run against a specific address, book a strategy session at mvphomegroup.com/nelsoncruz. We start with what the home should trade for and what the monthly payment will actually include, because those two facts decide how large a gift you need in the first place.
Nelson Cruz, P.A.
Founder & CEO
MVP Home Group, Real Broker LLC
Nelson brings nearly two decades in law enforcement to his work in real estate. View Nelson’s profile or contact our team at 407-901-9939 or [email protected].
Featured image: AI-generated editorial illustration of a signed one-page letter with illegible body text, resting on a wooden table beside a bank statement with one highlighted line, a blank personal check, a deposit slip and a pen in window light. No people and no readable text. Not a particular property, transaction or document.