Updated October 2026. How to use family money when you don’t have a deposit of your own: who can give, what the gift letter must say, and how to move the money, from Fannie Mae, HUD and IRS pages read October 29, 2026.
If you don’t have a deposit, a gift from family is the most common fix. As of October 2026, Fannie Mae’s Selling Guide (updated February 4, 2026) lets a gift cover all of the down payment, closing costs and reserves on a one-unit main home, with a signed gift letter. The IRS annual gift exclusion is $19,000 per recipient in 2026.
Jump to: 🤝 Who can give · 🏠 The gift letter · ⏱️ Moving the money · 🪜 Loan limits · 💲 Gift tax · ❓ FAQ
Key takeaways
- Fannie Mae: on a one-unit main home, all the funds can come from a gift, even above 80% loan-to-value. Two- to four-unit homes and second homes above 80% need 5% of your own money first.
- No gifts on investment properties under Fannie Mae’s rules.
- The gift letter needs the amount, a no-repayment statement, and the donor’s name, address, phone and relationship to you.
- Gifts up to $19,000 per person in 2026 fall under the IRS annual exclusion; above that, the donor files a gift tax return.
Who can give you money for a house?
Lenders care a lot about who the money comes from, because a “gift” from the wrong person is really a hidden loan or a price cut. The rules depend on your loan type.
| Loan type | Who can give | Who can’t |
|---|---|---|
| Conventional (Fannie Mae) | Relatives by blood, marriage, adoption or guardianship; a domestic partner or fiancé(e); a former relative; someone with a long-standing family-like or mentor relationship | The builder, developer, real estate agent or anyone else with an interest in the deal |
| FHA, gift of equity | Family members only, as HUD defines them (parents, grandparents, children, siblings, aunts, uncles, in-laws, spouse or domestic partner, foster and adopted children) | Anyone outside that family list |
Fannie Mae‘s rule has a friendly twist: the seller can be the donor if they’re an acceptable donor and aren’t tied to another party in the deal. That’s how a parent can sell a home to a child below market and call the difference a gift of equity.
HUD’s FHA answer on gifts of equity, published July 14, 2026, says only family members may give equity as a gift when selling to another family member. HUD keeps the full FHA gift rules in its Handbook 4000.1, and your lender will check them line by line.
Friends and employers aren’t automatic no’s, but they’re case by case. Ask your loan officer before anyone sends money.
What does a gift letter need to say?
Fannie Mae’s Selling Guide lists what the letter must include. HUD’s list for an FHA gift of equity is nearly the same, and HUD wants both the donor and you to sign and date it.
- The actual dollar amount, or the maximum amount, of the gift.
- A statement that no repayment is expected.
- The donor’s name, address and telephone number.
- The donor’s relationship to you.
Use your lender’s template. It saves a round of back-and-forth. And make sure the amount on the letter matches what actually arrives. Fannie Mae notes that if the amount changes, the lender may need to rerun your loan file.
One thing the letter can’t hide: a gift that’s really a loan. If your brother expects $500 a month back, that’s debt, and lenders count it. Being honest here protects you more than it protects the bank.
How should the gift money be moved?
This is where most gift problems happen. The money has to leave a traceable account and land in a traceable place. Fannie Mae accepts any of these:
- A copy of the donor’s check and your deposit slip.
- The donor’s withdrawal slip and your deposit slip.
- Proof of an electronic transfer from the donor’s account to yours or to the closing agent.
- A copy of the donor’s check to the closing agent, or a settlement statement showing it was received.
Cash in an envelope is the classic mistake. It might be a real gift, but you can’t prove where it came from. Wire it or write a check, and don’t move it through three accounts on the way.
Timing matters too. If the gift is meant for your earnest money deposit, it has to arrive before that deposit is due, which is usually within days of an accepted offer. Our guide to the earnest money deposit covers how much it is and how to keep it small. A gift can also go straight to the closing agent at closing if that works better for your family.
Are there limits on how much of the purchase a gift can cover?
Under Fannie Mae’s table, it depends on the property and loan-to-value (LTV):
| Property | LTV 80% or less | LTV above 80% |
|---|---|---|
| One-unit main home | All funds can be a gift | All funds can be a gift |
| Two- to four-unit main home | All funds can be a gift | 5% from your own funds first |
| Second home | All funds can be a gift | 5% from your own funds first |
| Investment property | Gifts not allowed | |
FHA and other programs have their own minimums. If you also use a state assistance program, stack the rules carefully; down payment assistance programs explained shows how Florida’s work. If you qualify for VA or USDA, you may not need a down payment at all, as our zero-down loan overview explains, and a gift can then go toward closing costs.
Does the person giving the money owe gift tax?
Usually not. The IRS gift tax FAQ sets the annual exclusion at $19,000 per recipient for 2026. Each spouse gets their own exclusion, so a married couple can give more to the same person.
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Buy a home →Above the exclusion, the donor generally files Form 709, the gift tax return; the same rule applies when parents sell a house for less than its value to a child. The donor, not you, is responsible for any gift tax. Most families never pay it, but the form matters. A short call with a tax professional before a large gift is cheap insurance.
For the big picture on household money, the Federal Reserve publishes consumer guides, and Bankrate has payment calculators that help you see what a gift changes in your monthly cost.
What if family help isn’t enough?
Gifts often fill the deposit and closing-cost gap rather than the whole purchase. The full list of cash items is in what you still pay with a zero-down loan. If a regular loan doesn’t work, seller financing and lease-to-own options are worth understanding, risks included.
You can also lower what you owe at closing. Beycome’s buyer program is open to every buyer on homes listed by other agents, with no upfront fee. Beycome keeps 1% of the price (minimum $1,499) and credits the rest of the buyer-agent commission at closing, with your lender’s approval. On a $400,000 home with 3% offered, that’s $8,000 back.
The credit can’t apply where no buyer-agent commission is offered, like most FSBO homes, or on homes listed by Beycome sellers. The 3% is an example only: commissions are not set by law or NAR rules and are negotiable, sellers choose whether to offer buyer-agent compensation, and since August 17, 2024 those offers can’t be shown on the MLS. It’s not a gift or a down payment; the lender decides how it’s applied.
Still deciding on a loan? Choosing the right home loan compares the main types.
Gift money questions
Can I really buy a house with no money down?
With a VA or USDA loan, yes, if you qualify. Otherwise, a family gift can cover the down payment, and on a one-unit main home Fannie Mae allows all funds to come from a gift.
Do I still have to pay closing costs if I don’t have a deposit?
Yes. Closing costs are separate. Gift money can pay them, and so can seller or lender credits.
Is it harder to qualify for a zero-deposit mortgage?
Not with a documented gift. Lenders treat a properly documented gift like your own money, as long as it’s not a hidden loan.
What is private mortgage insurance (PMI), and will I have to pay it?
PMI protects the lender on many conventional loans with a small down payment. A bigger gift can lower it or avoid it, so ask your lender where the cutoff sits for your loan.
Can a family member give me money for a down payment?
Yes. They sign a gift letter with the amount, a no-repayment statement and their contact details and relationship to you, and they move the money in a traceable way.
What if I don’t qualify for government loan programs?
A conventional loan with a gift, a state assistance program or a seller credit can still work. In Florida, start with Florida Housing down payment assistance for first-time buyers. Talk to two or three lenders.
Are there risks if I buy a home with no deposit?
You start with little equity, so an early sale can cost you. With a gift, the risk is paperwork: undocumented cash can delay or derail the loan.
How can beycome help me if I don’t have a deposit?
The buyer program has no upfront fee and can credit part of the buyer-agent commission at closing on homes listed by other agents, with lender approval. It doesn’t replace a gift or deposit.
Gift rules from Fannie Mae Selling Guide B3-4.3-04 (02/04/2026) and HUD’s FHA answer on gifts of equity (07/14/2026); tax figures from the IRS gift tax FAQ; all read October 29, 2026. Lenders may add stricter rules. General information, not tax, legal or financial advice.
Buyer credit: no upfront fee; Beycome keeps 1% of the price (minimum $1,499); the rest of the buyer-agent commission offered is credited at closing with lender approval; it doesn’t apply to FSBO homes or homes listed by Beycome sellers. Commission figures are examples only: not set by law or NAR rules, negotiable, and not shown on the MLS since August 17, 2024.
Sources
- Fannie Mae Selling Guide, B3-4.3-04 Personal Gifts (02/04/2026), read October 29, 2026.
- HUD FHA FAQ, Does HUD allow gifts of equity? (07/14/2026), read October 29, 2026.
- IRS, Frequently asked questions on gift taxes, read October 29, 2026.
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