Can I use gift money for my down payment, and what is a gift letter?

Yes — most loan programs let family members (and sometimes others) gift you down-payment funds, but lenders require documentation to confirm it's a true gift, not a loan. That documentation is a gift letter: a signed statement naming the giver, the amount, the relationship, the property address, and an explicit confirmation that no repayment is expected. Lenders also typically want to see a paper trail — a copy of the donor's withdrawal and your matching deposit — so deposit gift funds well before applying and keep records. On conventional loans, gifts can cover the entire down payment for a primary residence; FHA allows gifts too. Avoid large unexplained deposits, which lenders flag and may require you to source. Tell your loan officer about gift funds early so the paperwork is handled cleanly. Coordinate timing so the deposit clears before underwriting begins.