Gift Letter

What a Gift Letter Includes

• The donor's name, address, phone and relationship to the borrower.
• The dollar amount and the date the funds were or will be transferred.
• A statement that no repayment is expected.
• The address of the property being purchased.
• Signatures, plus bank records showing the money moving from donor to borrower.

Why It Matters More on Small Investment Deals

Conforming guidelines generally allow gift funds on a principal residence, including an owner-occupied 2- to 4-unit building, but not on a pure investment property. If you're buying a duplex to live in one side, a gift can help. If you're buying the same duplex as a rental, plan on your own funds. Commercial lenders on 5+ unit and commercial loans look at sponsor liquidity instead, and borrowed or gifted equity usually counts against you.

Common Mistakes

Depositing cash with no paper trail, receiving the gift after the application without telling the lender, or a gift that is really a loan with a side agreement. That last one can turn into mortgage fraud. Keep it clean: real gift, real paper trail.

A Hypothetical Tampa Example

A young couple is buying a fourplex in Tampa and will live in one unit. In this example, a parent gives them $40,000 toward the down payment. Because the property is owner-occupied, the lender accepts the gift with a signed gift letter and the parent's bank statement showing the transfer. Hypothetical scenario.

From the Desk

If the money has strings attached, it isn't a gift, and the lender will eventually find the strings.

What is a gift letter?

A signed donor statement that funds given toward a home purchase are a gift with no repayment expected.

Can gift funds be used on an investment property?

Generally not under conforming guidelines; gifts are typically limited to principal residences, including owner-occupied 2-4 unit homes.

Who can give a gift for a down payment?

Usually a relative or someone with a documented close relationship, depending on the loan program.

Does the lender verify the gift?

Yes. Expect to show the donor's withdrawal and your deposit.

Is a gift letter used on commercial loans?

Rarely. Commercial lenders evaluate the sponsor's own liquidity and net worth.

Article Summary

A gift letter proves down payment money is a true gift. It works on owner-occupied homes, including small multifamily, but generally not on pure investment property.

Key Takeaways

• ✓A signed statement that funds are a gift.
• ✓Backed by bank records.
• ✓Allowed mainly on principal residences.
• ✓Investment buyers should plan on their own funds.
• ✓A disguised loan is a serious problem.

About Michael R. Linton

Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor. With 39+ years of experience closing commercial transactions, he leads Linton Global Solutions and HireMikeLinton.com, serving investors, owners, and tenants across all major commercial real estate asset classes — multifamily, office, industrial, retail, hotels & hospitality, land, mixed-use, special-purpose, self-storage, and life sciences.

Michael holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722). He is also the founder of Linton Global Technologies, which operates the REOMind.ai AI-powered REO disposition platform serving a network of banks.

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Works Cited

1. Fannie Mae. "Selling Guide B3-4.3-04: Personal Gifts." Fannie Mae, https://selling-guide.fanniemae.com/sel/b3-4.3-04/personal-gifts. Accessed Oct 4, 2026.
2. Florida Department of Business and Professional Regulation. "License Verification: Michael R. Linton, Florida Broker BK703722." MyFloridaLicense.com, https://www.myfloridalicense.com/wl11.asp. Accessed Oct 4, 2026.

Disclosure & Compliance

Disclosure: This article discusses proprietary technology developed by Linton Global Technologies. Michael R. Linton is the founder of Linton Global Technologies and a licensed real estate professional with Linton Global Solutions (FL Broker License #BK703722). This content is for informational purposes only and does not constitute investment, legal, or financial advice.

Compliance Statement: All CREDDS and REOMind.ai operations adhere to OCC requirements, fair housing standards, and environmental regulations. Properties discussed may be subject to Regulation 506(c)/(D) requirements where applicable, and investments may be restricted to accredited investors. Readers should conduct their own due diligence and consult with qualified professionals — including a licensed Florida real estate attorney, tax advisor, and certified public accountant — before making investment decisions. Past performance does not guarantee future results.