Fillable Form Gift Letter

What is a Gift Letter?

A Gift Letter is a legal document used to certify that you or someone else has or will give a certain amount of money to another person as a gift. The document asks for information about the transfer of money itself, as well as the name of the donor (the person gifting the money) and the recipient (the person receiving the money) and their relationship.

Gift Letters are specifically used to clarify that a particular transfer of money is not a loan or a payment, and thus does not need to be paid back in any way, which is useful for proving your reliability despite sudden increases to your cash flow that can be mistaken for taking loans or other such things. 

How do I fill out the Gift Letter?

Gift Letters require information about the amount of money gifted, the donor, the recipient, and how the funds were transferred. You will also need to attach some additional documents to prove that the funds were transferred from the correct account.

Donor Name

Enter the full legal name of the donor. 

Amount Gifted

Enter the amount of money gifted.

Recipient Name

Enter the full legal name of the recipient.

Relationship

Enter the donor’s relationship with the recipient.

Property Address

Enter the address of the property that the money was gifted to the recipient for. 

Date of Gift

Enter the date that the money was gifted to the recipient.

Name of Depository or Other Source

Enter the name of the depository or otherwise that the funds were transferred from.

Address

Enter the address of the above indicated depository or other source.

Account Number

Enter the account number that the donor used to gift the money to the recipient.

Signature, Address, and Contact Information of Donor

Have the donor sign the form in the space provided. Then enter their primary telephone number and residential address.

Recipient Signature

Have the recipient sign the form in the space provided.

Frequently Asked Questions (FAQs)

When do I need a Gift Letter?
Often, when applying for something such as a mortgage or loan, you will be asked for some information regarding your finances. Gifts of large sums of money will be reflected on your finances, which may be cause for concern to the lender as it may be a sign of a loan that you would have to pay back before your debt to them.

What are the different kinds of Gift Letters?

Gift letters can be used in a few different ways, and understanding how and when they’d come into play can help you decide whether or not you may need one. 

• Gift Letter for Estate Planning - If you received a large monetary gift that you don’t anticipate ever having to pay back, a gift letter can be a nice back up to keep on file. 
• Gift Letter for Mortgage - A mortgage gift letter can save you time and reduce the risk of your loan being denied.
• Gift of Equity Letter - If you’re one of those lucky people who found the rare opportunity of a family member or close friend selling you a property at a price well below market value, A gift of equity letter can detail the difference between the sale price you paid, and the actual fair market value. 
• FHA Gift Letter - Federal Housing Administration (FHA) loans are issued by an FHA-approved lender and are insured by the FHA.  If you're gifted money to use as a down payment, an FHA lender will still likely want proof that the money was, in fact, a gift.
• Money Gift Letter from Parents - If your parents are inclined to gift you money to enhance your financial future, a money gift letter is a smart thing to ask them to include with their generous monetary gift.

Does a Gift Letter Have to Be Notarized?

No, a gift letter does not need to be notarized. However, both you and the donor do need to have signed it for it to be valid. 

Can I write a Gift Letter for myself as the recipient?

No. A Gift Letter must be prepared by the donor, detailing their relationship with the recipient alongside any other documents proving the validity of the gift. 

Does a Gift Letter Have to Be From a Family Member?

No, a gift letter doesn’t have to be from a family member. It can also be from a close friend, as long as it’s clear that you have a very close and personal relationship with one another. 

Is a Gift Letter the only document I need to prove the validity of the gift?

Not necessarily. While a gift letter alone is a great start, some lenders may request further information to ascertain the money is actually a gift. They may want to see the donor’s bank statements to ensure they actually had enough money to give you or ask for a bank slip that shows the money was transferred. 

Why is it important to prove that the money was given as a gift?

If money was given as a gift without an obligation to repay it attached, then your ability to repay loans or pay mortgages on time remains the same, leaving you qualified for the mortgage or loan. 

What happens if the transaction on the Gift Letter turns out to not be a gift?

If the donor attempts to collect payment for the gifted money after providing a Gift Letter, they may face legal consequences for doing so both from the recipient and the person that requested that a Gift Letter be provided. 

Is there a deadline for filing a Gift Letter?

A Gift Letter will need to be given to a lender or otherwise by the date agreed upon when the letter is requested. 

What documents do I need to prepare alongside a Gift Letter?

Commonly, the gift letter must be accompanied by the following:

• a copy of the donor’s check and the borrower’s deposit slip,
• a copy of the donor’s withdrawal slip and the borrower’s deposit slip,
• evidence of the electronic transfer of funds from the donor’s account to the borrower’s account or to the closing agent,
• a copy of the donor’s check to the closing agent, or
• a settlement statement showing receipt of the donor’s check.

Other requirements may be needed depending on the reason for why the gift letter is needed.

What requirements are needed if the gift money is being pooled with my own so that I and the Donor can reach a minimum required down payment?