Documentation
Gift funds, seasoning, and the paper trail that clears
Gifts stall more Richmond files than credit scores do. Not because they are disallowed, but because the money arrives before anyone explains how it has to arrive.
Donor rules
Who may give, by programme
The donor list is narrower on conventional than on FHA, and narrowest of all on an investment property, where gifts cannot be used at all.
| Programme | Acceptable donor | Minimum from your own funds | Note |
|---|---|---|---|
| Conventional, primary residence | Relative by blood, marriage, adoption or legal guardianship; fiancé, fiancée or domestic partner | None. The entire down payment may be gifted. | A gift from an unrelated party is not acceptable, however close the friendship. |
| Conventional, second home | Same relative list as a primary residence | None on a one-unit second home | Investment property purchases may not use gift funds at all. |
| FHA | Relative, employer, labour union, close friend with a clearly defined interest, charitable organisation, or a government agency | None. FHA permits a 100% gifted down payment. | The 'close friend with a clearly defined interest' route exists but draws extra underwriting scrutiny. |
| VA | Anyone without an interest in the sale of the property | None, and no down payment is required in the first place | The donor may not be the seller, the builder, the agent or anyone else paid in the transaction. |
| USDA | Relative or a documented non-profit, with the same no-interest-in-the-sale rule | None | USDA files also test household income, so a large gift can interact with the eligibility calculation. |
In every case the donor may not be the seller, the builder, the agent or anyone else being paid in the transaction. Scroll the table sideways on a narrow screen.
Seven lines
What the gift letter must contain
The line that comes back most often is the relationship. A letter naming the donor without stating that she is the borrower's aunt will be returned, every time, and the return costs two days.
- Donor's full legal name, address and telephone number
- Donor's relationship to the borrower, stated explicitly
- The exact dollar amount of the gift
- The date the funds were or will be transferred
- The complete property address the funds are being applied to
- A statement that no repayment is expected or implied, in any form
- Signatures of both the donor and the borrower
Sequence it earlyFive documents
The paper trail, in order
- 01
Donor's bank statement
Showing the funds in the donor's account before the transfer, and showing the withdrawal.
- 02
Transfer evidence
A wire confirmation or a cancelled cheque. A screenshot of a banking app is usually rejected.
- 03
Borrower's deposit
A statement or a deposit receipt showing the exact amount landing in your account, matching to the cent.
- 04
No commingling
Deposit the gift alone. A gift mixed with a payroll deposit in one transaction takes days to unpick.
- 05
Or a direct wire to settlement
The cleanest route. The donor wires the settlement agent directly and the funds never touch your account.
Seasoning
Eight rules about where money came from
A seasoned dollar needs no explanation. An unseasoned one needs a story with documents attached.
- Seasoned funds
- Money that has sat in your account for the full 60-day statement window is considered seasoned and does not need sourcing.
- Large deposit threshold
- Any single deposit above 50% of your total monthly qualifying income generally must be sourced and explained.
- Cash is not an asset
- Physical cash deposited into an account cannot be used, at any amount, on any agency programme. There is no workaround.
- Crypto
- Must be liquidated to US dollars and seasoned in a bank account. The exchange statement and the transfer both have to be shown.
- Sale of a personal asset
- Usable with a bill of sale, proof of prior ownership and evidence of the buyer's payment. A car, a boat, a collection.
- Sweat equity
- Work you performed on the property is not an acceptable source of funds on any standard agency programme.
- Retirement account withdrawal
- Usable with the terms of withdrawal, evidence of receipt, and the account statement showing the balance before.
- Earnest money
- Sourced from the account it left, which is why the cheque clearing before pre-approval is easier than after.
Yes. On a conventional primary residence purchase the entire down payment may be gifted by a relative, with no minimum contribution required from you. We need a signed gift letter and a full paper trail from the donor's account to the closing table.
The donor's name, address and phone, their relationship to you, the exact amount, the transfer date, the property address, an explicit statement that no repayment is expected, and both signatures. A missing relationship line is the most common reason one comes back.
Physical currency cannot be sourced to an origin, so no agency programme accepts it at any amount. If you have been saving cash at home, deposit it and let it season in the account for at least sixty days before you begin, or it simply will not count.
Generally any single deposit exceeding half of your monthly qualifying income. Transfers between your own accounts are easy to explain. Unexplained deposits are the most common reason a file stalls in underwriting.
Funds that have sat through a full sixty-day statement period are considered seasoned and need no explanation. Anything newer needs sourcing, which means showing where it came from and that it was not borrowed.
Only after liquidating to US dollars and seasoning the proceeds in a bank account. You will need the exchange statement showing the sale and the transfer record showing the funds arriving.
Tell me about the gift on the first call
Sequencing it correctly costs nothing. Fixing it afterwards costs days, and days are what lock extensions are priced in.
Three wholesale quotes on the same day's pricing, before you choose.