Can I use gift funds to reach 20% down and avoid PMI?

Yes, this is the smartest strategy. When you put down 20% or more, 100% of your down payment can come from gift funds. For example, if you have $20,000 saved and your parents gift you $60,000, you can put $80,000 down on a $400,000 home (20%), eliminate PMI entirely, and save $100-$300/month.

How much do I need to contribute from my own funds?

Depends on your down payment: 20% or more down requires $0 from you - 100% can be gifted. Less than 20% down requires you contribute at least 5% from your own funds. Investment properties and second homes have stricter rules.

Can gift funds be used for closing costs too?

Yes. Gift funds can be used for both down payment and closing costs. In Nevada, typical closing costs run 2-3% of the purchase price. Just ensure the gift letter specifies the total amount and that all funds are properly documented.

Do gift funds affect my debt-to-income ratio or credit score?

No, gift funds don't affect DTI or credit. Since it's a gift (not a loan), there's no repayment obligation, so it doesn't increase your debt load or count against your debt-to-income ratio. Your credit score is unaffected.

Can my boyfriend/girlfriend give me a gift for a down payment?

Only if you're engaged. Conventional loans allow gifts from a fiancé or fiancée who will occupy the property with you. You'll need to provide proof of engagement. Unmarried partners who aren't engaged typically cannot provide conventional loan gift funds.

What if I already received the gift months ago?

Even better – those are seasoned funds. If the gift has been in your account for 60+ days (2+ bank statement cycles), it's considered seasoned and requires minimal documentation. This is the easiest scenario.

Can I get a conventional loan with 100% gift funds?

Yes, but only with 20%+ down. If you're putting down 20% or more, 100% of your down payment AND closing costs can come from gift funds. However, if putting down less than 20%, you must contribute at least 5% from your own verified funds.

Are there tax implications for the donor or recipient?

Recipients don't owe taxes on the gift. For donors, the IRS allows gifts up to $18,000 per person per year (2024) without tax implications. For larger gifts, donors can file IRS Form 709 which counts against their lifetime exclusion. Donors should consult their tax advisor for gifts over $18,000.

Using Gift Funds for Conventional Loan Down Payment Nevada

Who Can Give You Gift Funds?

Conventional loans have specific requirements about acceptable gift donors and documentation.

Family Members

Parents, grandparents, siblings, spouse, children, and other blood relatives or legally adopted family members.

✓ Most Common & Easiest

Fiancé(e)

Your fiancé or fiancée can provide gift funds if you're getting married and will both occupy the property.

✓ Must Prove Engagement

Employer

Your employer can provide gift funds through relocation assistance or employee homebuyer programs.

✓ Document Employment

Labor Union

Union members may receive gift funds through union-sponsored homebuyer assistance programs.

✓ Check Union Benefits

Government Programs

Nevada Housing Division and local agencies can provide down payment assistance grants for qualifying buyers.

✓ View Programs

Charitable Organizations

501(c)(3) nonprofits can provide gifts if there's no connection to the seller or real estate transaction parties.

✓ Must Be Independent

Who CANNOT Provide Gift Funds

The home seller
Real estate agent or broker
Builder or developer

Loan officer or lender
Anyone with financial interest in sale
Parties affiliated with transaction

This prevents conflicts of interest and ensures the gift is truly a gift, not a hidden inducement to purchase.

Conventional Loan Gift Letter Template

Use this template to create a compliant gift letter for your Nevada conventional mortgage.

GIFT LETTER
Date: _______________
To Whom It May Concern:

          I/We, [DONOR'S FULL NAME(S)],
          hereby certify the following:
        

            1. I/We have made a gift of
            $[GIFT AMOUNT] to
            [BORROWER'S FULL NAME(S)],
            my/our [RELATIONSHIP].
          

            2. This gift is to be applied toward the purchase of the property
            located at:

            [PROPERTY ADDRESS]

            [CITY, STATE ZIP]
          

            3. This gift is made with no expectation of repayment in the form of
            cash or by future services of the recipient.
          

            4. The source of these funds is
            [CHECKING/SAVINGS/INVESTMENT ACCOUNT]
            at [BANK NAME].
          

            5. The funds were transferred on
            [DATE] via
            [WIRE/CHECK/TRANSFER].
          
Sincerely,
______________________________________
Donor Signature
______________________________________
Donor Printed Name
Donor's Address:
[STREET ADDRESS]
[CITY, STATE ZIP]
Donor's Phone:
[PHONE NUMBER]

Download Template

We'll provide you with a pre-filled template when you apply. Or contact us now for a customized version.

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Our loan officers will guide you through the gift letter process and review your documentation before submission.

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Conventional Loan Gift Funds FAQ

Common questions Nevada homebuyers ask about using gift money for conventional mortgages.

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Required Documentation for Gift Funds

Lenders require a paper trail proving the gift is legitimate and the funds are properly sourced.

1. Gift Letter (Required)

Must Include:

Donor's name, address, phone number
Borrower's name and relationship to donor
Dollar amount of gift
Property address
Statement that no repayment is expected
Donor's signature and date
Date funds were or will be transferred

Download Gift Letter Template Below

2. Financial Paper Trail

Donor's Bank Statement

Show the donor had sufficient funds in their account before the gift. Typically need most recent statement showing withdrawal.

Proof of Transfer

Wire transfer confirmation, cashier's check, or online transfer receipt showing funds moving from donor to you.

Your Bank Statement

Show the deposit in your account. The gift funds must be seasoned (sit in your account) for at least 2 statement cycles for best results.

Relationship Verification

May need birth certificates, marriage license, or other docs proving your relationship to the donor.

Timing Matters: Seasoned vs. Non-Seasoned Funds

✓ SEASONED FUNDS (Easier)

Gift funds in your account for 60+ days before applying are considered "seasoned" and require minimal documentation.

Best approach: Get the gift early, let it sit 2+ months, then apply. Smoothest process.

⚠ NON-SEASONED (More Docs)

Gifts received within 60 days of application require full paper trail: gift letter, donor statements, transfer proof.

Still acceptable, just requires complete documentation chain.

Conventional Loan Gift Fund Requirements

Unlike FHA loans, conventional mortgages have stricter gift rules depending on your down payment amount and property type.

100%

Gift allowed for down payment when you put down 20% or more

Your minimum required contribution for down payments under 20%

PMI cost when you reach 20% down with gifts

20%+ Down Payment

When putting down 20% or more, 100% of your down payment can come from gift funds. You don't need any personal funds if the donor covers everything.

No PMI required
Best interest rates
Entire down payment can be gifted
Closing costs can also be gifted

Under 20% Down Payment

With less than 20% down, you must contribute at least 5% from your own funds. Gifts can cover the remainder plus closing costs.

Minimum 5% from your own savings
Gift funds can supplement beyond 5%
PMI required until 20% equity
Strategy: Use gifts to reach 20% and avoid PMI

Smart Strategy: Use Gifts to Reach 20% Down

The best use of gift funds on a conventional loan is to reach the 20% down payment threshold. This eliminates PMI (saving $100-$300/month), qualifies you for better rates, and builds instant equity.

Example on $400,000 Nevada Home:

10% Down ($40,000)

Your savings: $20,000 (5%)

Family gift: $20,000 (5%)

PMI: ~$200/month

20% Down ($80,000)

Your savings: $20,000 (5%)

Family gift: $60,000 (15%)

PMI: $0/month ✓

Using Gift Funds for Your Conventional Loan Down Payment