The Gift Letter form is a document used to confirm that a monetary gift has been given to a borrower, typically for the purpose of a home purchase. This form serves as proof that the funds are indeed a gift and not a loan, which is crucial for mortgage approval. Understanding its importance can help ensure a smoother home buying process.
The Gift Letter form serves as an essential document in the realm of financial transactions, particularly when it comes to real estate purchases. This form is typically used to confirm that a monetary gift has been provided to a homebuyer, often from family members or close friends, to assist with the down payment or closing costs. By clarifying that the funds are indeed a gift and not a loan, the form helps to alleviate concerns from lenders regarding the buyer's debt-to-income ratio. Key elements of the Gift Letter include the donor's information, the recipient's details, the amount of the gift, and a statement affirming that repayment is not expected. Additionally, the form may require signatures from both the donor and recipient, ensuring that both parties acknowledge the nature of the transaction. Understanding the purpose and requirements of the Gift Letter form can simplify the homebuying process and facilitate smoother communication between buyers and lenders.
GIFT LETTER
Applicant(s):
Loan Number:
I,
, do hereby certify the following:
(Donor)
(1) I have made a gift of $
to
(Amount)
(Recipient)
Whose relationship is:
(Relationship)
(2) This gift is to be applied toward the purchase of the property located at:
(Property Address)
(3)No repayment of the gift is expected or implied in the form of cash or by future services of the recipient.
(4)The funds given to the homebuyer were not made available to the donor from any person or entity with an interest in the sale of the property including the seller, real estate agent or broker, builder, loan officer, or any entity associated with them.
(5)The source of this gift is:
(Source)
Donor Signature
Date
Borrower Signature
Donor Name (Print or Type)
Donor Address
(
)
Donor Phone Number
WARNING: Our signatures above indicate that we fully understand that it is a Federal Crime punishable by fine, imprisonment, or both to knowingly make any false statement concerning any of the above facts as applicable under the provision of Title 18, United States Code, Section 1012 and 1014.
Attachments:
1.Evidence of Donor's Ability to Provide Funds.
2.Evidence of Receipt of Transfer of Funds.
Calyx Form - giftlttr.frm (05/02)
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Gift letters are essential documents that help clarify the nature of a financial gift, especially in real estate transactions.
These letters should explicitly state that the funds provided are a gift and not a loan, ensuring that the recipient does not have to repay the amount.
It is important to include the donor's name, address, and relationship to the recipient in the letter to establish a clear connection.
The letter should detail the amount of the gift and the purpose, such as assisting with a home purchase or covering closing costs.
Signatures from both the donor and the recipient add credibility to the document and may be required by lenders.
Providing a gift letter can simplify the mortgage application process, as it helps lenders verify the source of funds.