Gift money can help with the upfront cost of buying a home, but your mortgage lender must approve its source, purpose, and documentation. Tell your loan officer about the gift before money changes hands so the transfer fits your loan program.
Reviewed September 10, 2026, using the official sources linked below.
What counts as a genuine gift?
A gift is money you are not expected to repay. If you have an agreement to pay the donor back, disclose that arrangement to your lender instead of signing a letter calling it a gift. Ask which purchase costs your specific loan allows the funds to cover.
Who can provide gift money?
Rules differ by mortgage program. Under Fannie Mae’s personal-gift rules, permitted donors include qualifying relatives and certain people with a familial or long-standing mentorship relationship. Donors generally cannot be interested parties such as a builder or real estate agent. There is an exception for a seller who is also an acceptable donor and is not affiliated with another interested party. Gift funds are not permitted for investment-property loans under this policy. The lender must also check whether your transaction requires a contribution from your own funds. These are Fannie Mae rules, not a universal donor list for every loan. Read Fannie Mae’s personal-gift requirements.
For an FHA, VA, USDA, or other conventional mortgage, request the lender’s checklist for that exact program. Do not assume another buyer’s donor, transfer method, or down payment arrangement will work for your application.
Keep the gift letter and transfer records together
Fannie Mae requires a donor-signed gift letter identifying the amount, the donor’s contact information and relationship to the borrower, and that repayment is not expected. The lender must verify the funds and their transfer. Use your lender’s form and ask which bank or settlement records are needed before moving the money. Check the documentation section of the official guide.
What are the 2026 federal gift-tax rules?
The IRS lists the annual gift-tax exclusion as $19,000 per donor, per recipient for 2026. A gift above the exclusion may require the donor to file Form 709; filing does not automatically mean gift tax is payable. The amount and type of gift, other gifts during the year, and the donor’s circumstances matter. Gift-splitting between spouses also has reporting rules. The recipient generally does not include a genuine cash gift in income. See the IRS gift-tax FAQs and guidance for recipients.
For example, a $20,000 gift from one parent to one child exceeds the 2026 annual exclusion. Do not assume no return is needed because both parents are married. Have the donor check the reporting treatment with a tax professional. Mortgage approval and gift-tax reporting are separate questions.
Plan the rest of your home purchase
Ask your lender to show the remaining cash needed to close, any reserve requirement, and your projected housing payment after the gift. If you are also exploring assistance, read our Houston down payment assistance guide; combining sources requires program approval.
Our buyer services can help you organize the property search alongside your financing plan. You can also explore Katy homes when you are ready to compare options. For help planning your next step, contact Aurhomes Group or call (281) 724-3966.
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