Using Gift Funds for Your Down Payment in Texas

If a family member wants to help you buy a home, gift funds can be a great way to cover part of your down payment or closing costs. There are a few rules to follow so the gift does not slow down your loan.

Who Can Give a Gift?

Most loan programs allow gifts from relatives. Some also allow gifts from a fiance, domestic partner, employer, or close friend. The exact rules depend on the loan type.

What Lenders Need

• A gift letter. A signed letter stating the amount, the relationship, and that the money does not need to be repaid.
• A paper trail. Proof of the transfer from the giver's account to yours or to the title company.
• Proof the giver had the funds. Sometimes a bank statement from the giver is requested.

Tips to Keep It Simple

Talk to your lender first. Ask how and when the gift should be transferred.

Avoid cash deposits. Cash is hard to document. Use a check or wire.

Do not move money around. Large transfers between accounts can create extra paperwork.

Gift Funds and Loan Types

FHA, VA, and conventional loans all allow gift funds in many cases. Some conventional loans may require a portion of the down payment to come from your own money depending on the property and the amount you put down.

Ready to Get Started?

If family is helping you buy, reach out. We can walk you through the process so your gift is documented the right way from day one.