A written document confirming a gift donor's relationship to the borrower, the gift amount and its source, as well as a signed statement confirming no expectation of repayment.
First and foremost, a "gift" is any funds contributed toward a home purchase to help cover a borrower's down payment and/or closing costs.
A gift letter is a written document confirming the gift donor's relationship to the borrower, the gift amount and its source, as well as a signed statement confirming that the funds are indeed a ‘gift’ with no expectation of repayment.
A donor must be a family member or close friend, depending on loan product. Finally, the gift letter must be completed accurately and reviewed by the underwriter for loan approval.