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Gift Letter

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What is a Gift Letter?

We can define a gift letter as a legal statement that ensures your bank or lender that the funds that came into your bank account are a gift rather than a loan. Note that a gift letter isn’t a promissory note. A gift letter from a donor (typically relatives or friends) explains that the funds are being given without any expectation of repayment. Also, the letter specifies who’s gifting the money as well as where the donor’s money is coming from.

Examples of Gift Letters

  • Example 1: Gift letters for single-family homes
  • Example 2: Gift letters for FHA home loans

Here’s Investopedia’s definition of a Gift Letter .

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