Family money moves a lot of Richmond buyers across the line. It also sinks files in the last two weeks before closing, almost always for the same reason: the money was real, the generosity was real, and the paper trail was not. Underwriting cares only whether it can trace the dollars from the donor’s account to yours without a gap.
Three things a lender needs to be true
2. The donor is an acceptable donor. The rules differ by loan type and relationship.
3. The money can be sourced. The lender must see the funds in the donor’s account or trace the transfer. Money that simply appears in your account is not sourced.
Fannie Mae sets these out in Selling Guide section B3-4.3-04, Personal Gifts, updated 4 February 2026. Everything below attributed to conventional financing comes from that section, read 11 September 2026.
Who is allowed to give you the money
On a conventional loan, a gift may come from a relative, defined as your spouse, child or other dependent, or anyone related to you by blood, marriage, adoption or legal guardianship. It may also come from a non-relative who shares a familial relationship: a domestic partner or a relative of that partner, someone engaged to marry you, a former relative, or an individual with a long-standing familial-like or mentorship relationship. That last category is broader than most people assume, so raise a godparent or a long-time mentor with your lender rather than ruling them out.
Gifts may fund all or part of the down payment, closing costs or reserves on a principal residence or second home, but not on an investment property. On a one-unit principal residence Fannie Mae requires no minimum borrower contribution from your own funds at any loan-to-value ratio, so the whole amount can be a gift. On a two to four unit principal residence or a second home above 80% loan-to-value, you must put in 5% of your own funds first.
[DATA NEEDED: FHA acceptable gift donor list, minimum borrower contribution and gift documentation requirements, from HUD Handbook 4000.1. FHA permits a broader donor list than conventional, but we did not verify the current list on a HUD primary source and will not reproduce it from memory.]
The documentation walkthrough
- Write the gift letter. Signed by the donor, containing three things: the actual or maximum dollar amount, the donor’s statement that no repayment is expected, and the donor’s name, address, telephone number and relationship to you. If the gift comes from a trust or estate established by an acceptable donor, the letter names the trust or estate account.
- Get the donor’s bank evidence. The lender must verify that funds sufficient to cover the gift are in the donor’s account, or have already been transferred to you. Warn the donor a statement page will be requested. That conversation goes badly as a surprise three days before closing.
- Transfer the money in a traceable form. The Selling Guide accepts the donor’s check plus your deposit slip; the donor’s withdrawal slip plus your deposit slip; evidence of an electronic transfer from the donor’s account to yours or to the closing agent; the donor’s check made out to the closing agent; or a settlement statement showing receipt of it.
- If it arrives at settlement instead. Where funds are not transferred before settlement, the donor must give the closing agent the gift as an electronic transfer, a certified check, a cashier’s check or another official check.
- Hand it all over at once. A gift letter without transfer evidence is half a document and will simply generate a condition.
Get the Richmond closing-timeline checklist
A gift is a timing problem as much as a paperwork problem. The letter, the donor statement and the transfer evidence all have to land before your file reaches the underwriter. Our downloadable Richmond closing-timeline checklist sets out every milestone from accepted offer to keys, with the point where gift documentation must be complete marked on it.
Request the Richmond closing-timeline checklist and we will email you the PDF.
Cash is how gifts break
Look again at the list of acceptable transfer evidence. Every item is a bank instrument: a check, a withdrawal slip, an electronic transfer, a settlement statement. Physical cash appears nowhere, because cash handed across a kitchen table has no origin a lender can verify.
A grandmother who withdraws $15,000 and hands it over in an envelope has created a problem no letter fixes after the fact. Depositing it produces an unsourced large deposit, underwriting will question it, and the honest answer makes things worse. The repair is for the donor to deposit the cash into her own account, let it season, then transfer it by check or wire with the trail intact. Weeks, not days.
Seasoning works the same way. Funds sitting in your account across a full statement cycle generally stop drawing questions. Funds that arrived last Tuesday do not. If a gift is coming, get it early.
Disclose the gift at pre-approval, not at the closing table
Tell your loan officer in the first conversation that part of your funds will be a gift, how much, and from whom. Donor eligibility takes a minute to settle at the start and is expensive at the end. The amount you are underwritten for depends on the gift, and if the actual gift differs the lender may have to resubmit the file. And the gift changes what appears on your Closing Disclosure, which the CFPB explains line by line in its Closing Disclosure guide. A mismatch there surfaces at the worst moment.
Our preferred lenders page lists who we send Richmond buyers to, and our first time buyer guide for Richmond covers where pre-approval sits.
What a gift actually has to cover in this market
| Area | Median sold price (July 2026) | YoY | 5% of median | 20% of median |
|---|---|---|---|---|
| Richmond Metro | $460,000 | +2.2% | $23,000 | $92,000 |
| Richmond City (city-level) | $450,000 | -3.4% | $22,500 | $90,000 |
| Henrico County (county-level) | $475,000 | +11.8% | $23,750 | $95,000 |
| Chesterfield County (county-level) | $440,000 | -3.3% | $22,000 | $88,000 |
| Median price per square foot | [DATA NEEDED: median price per square foot, July 2026, by area] | |||
Those columns are arithmetic on the published medians, not programme minimums, and they show the scale of the conversation. A gift covering 5% on a median Henrico County house is $23,750; covering 20% is $95,000; the documentation burden is identical either way. Closing costs sit on top, and the CFPB list of fees paid at closing and who pays them is the realistic inventory. Gift funds may be applied to those too.
Before you size a gift, size the requirement. Our post on what down payment you actually need in Richmond and the companion on whether you need 20% down in 2026 work from these same medians. A gift plus a grant may close the gap entirely: Virginia Housing DPA grant, CCA grant and second mortgage compared covers the state programmes that stack with family money. If the property or its condition is unusual, see USDA loans around Richmond and renovation loans in Richmond.
The Richmond property search runs off the live MLS feed across the city, Chesterfield County and the rest of the metro, including tighter pockets like The Fan where a gift is often the only route in.
Give your donor a deadline
The gift letter and the donor’s bank evidence come early in the sequence. Our downloadable Richmond closing-timeline checklist shows where, so you can tell your donor in week one what will be asked for.
Request the Richmond closing-timeline checklist and we will send it over.
Gift fund questions
Can my parents gift me the money and then I pay them back quietly?
No. The gift letter requires the donor to state that no repayment is expected, and signing that while holding a private repayment agreement is mortgage fraud. If the money is a loan it must be disclosed as a debt, which changes your debt-to-income ratio. Tell the lender the truth and let them structure it.
Can a gift cover my closing costs rather than my down payment?
Yes. Fannie Mae allows gift funds to cover all or part of the down payment, closing costs or financial reserves. One narrow exception: a gift of equity may not be used for financial reserves.
Can the seller gift me money?
Only narrowly. A seller who is independently an acceptable donor and not affiliated with any other interested party can give a gift, which in practice means a family sale. In an ordinary transaction the seller is an interested party and the correct instrument is a seller credit negotiated in the contract.
What if my donor and I live together and are pooling funds?
There is a specific path. When a gift from an acceptable donor is pooled with your funds to make the required minimum cash down payment, the donor must certify they have lived with you for the past 12 months and will continue to in the new home, and you must supply documents showing shared residency at the same address, such as a driver’s licence, a bill or a bank statement.
Is a wire better than a cashier’s check?
A wire from the donor’s own account is cleanest, because it creates an unambiguous record from one named account to another. A cashier’s check is acceptable, including at settlement, but one purchased with cash defeats the purpose. Whatever the instrument, the money must leave a bank account the donor can document.
How early should the gift land in my account?
As early as you can arrange. Funds in your account across a full statement cycle are far less likely to generate conditions than funds that arrived during underwriting. If timing is tight, transferring directly to the closing agent is often simpler, because the settlement statement then evidences receipt.
