Guideline answers · Fannie Mae
Fannie Mae · Assets
What are Fannie Mae's rules for gift funds?
Gifts from an acceptable donor are allowed on a principal residence or second home, never on an investment property. A one-unit principal residence needs no borrower contribution at any LTV; a two- to four-unit principal residence or a second home above 80% LTV needs 5% from the borrower's own funds.
Checked against the sources below on October 29, 2026. Reviewed by Chris Black, NMLS 275073, on November 2, 2026.
The rules
- Occupancy: principal residence or second home. Gifts are not allowed on an investment property.
- Use: all or part of the down payment, closing costs or reserves, subject to the minimum contribution. A gift of equity cannot be used for reserves.
- Acceptable donors: a relative by blood, marriage, adoption or legal guardianship, a domestic partner (or their relative), a fiance, a former relative, or someone with a long-standing familial-like or mentorship relationship. Never the builder, developer, real estate agent or another interested party, or anyone affiliated with them.
- 80% LTV, CLTV or HCLTV or less (one- to four-unit principal residence or second home): no minimum borrower contribution. The whole amount can be a gift.
- Above 80%: a one-unit principal residence still needs no minimum contribution. A two- to four-unit principal residence or a second home needs 5% from the borrower's own funds.
- Gift letter: signed by the donor, with the actual or maximum amount, a statement that no repayment is expected, and the donor's name, address, phone number and relationship. A gift from a trust or estate names that account.
- Transfer: show the funds in the donor's account or moved to the borrower, for example the donor's check and the borrower's deposit slip, an electronic transfer, or a check to the closing agent. Funds given at closing must come by electronic transfer, certified, cashier's or other official check.
Watch for
- A donor who has lived with the borrower for the last 12 months, and will live in the new home as a principal residence, can count toward the minimum contribution as the borrower's own funds. That needs the donor's certification and proof of the shared address.
- If the gift actually received differs from the amount in DU, the loan may need to be resubmitted.
- HomeReady has its own minimum contribution rules (B5-6-02).
Sources
Fannie Mae Selling Guide, B3-4.3-04 Personal Gifts
Gift funds may fund all or part of the down payment, closing costs, or financial reserves subject to the minimum borrower contribution requirements below. Gifts are not allowed on an investment property.
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