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Gift funds can make a Miami purchase possible—but only if you treat them like underwriting will: verified, documented, and traceable. The fastest way to delay (or kill) a loan is sloppy gift paperwork, mystery transfers, or “we’ll explain it later” logic.
Florida isn’t special here. The rules are driven by loan type and lender overlays.
What gift funds can be used for (by loan type)
Conventional (Fannie Mae / Freddie Mac)
For a primary residence or second home, gift funds may be used for down payment, closing costs, and even reserves (depending on the file), but not for investment properties.
Key point: conventional gifts must come from acceptable donors (typically relatives or other permitted relationships).
FHA
FHA allows gift funds for down payment and closing costs (and has detailed requirements in HUD’s 4000.1 handbook).
VA
VA itself doesn’t work like conventional “donor list” rules in every case, but lenders still require gifts to be properly sourced and documented and will scrutinize any third-party funds used to close.
The gift paperwork underwriters actually want
No matter the program, expect some version of:
1) A signed gift letter
Typically includes:
- donor name + relationship
- exact gift amount
- address of the property (sometimes)
- statement that it’s a true gift with no repayment expected
- donor and borrower signatures
Conventional explicitly requires documentation of the gift and the transfer.
2) Proof the donor had the funds
Underwriting commonly wants donor account evidence (e.g., bank statement showing available funds).
3) Proof the funds moved (the “money trail”)
This is where most people mess up. Lenders typically want:
- copy of the check/wire
- borrower deposit receipt or bank statement showing deposit
- wire confirmation (if wired)
Fannie Mae guidance focuses on verifying donor funds and transfer. (Fannie Mae Selling Guide)
The mistakes that blow up underwriting (Miami edition)
Mistake #1: “Cash gift” with no trail
If the money shows up as a cash deposit, underwriting will treat it like a problem. Cash is hard to source, and “it was a gift” is not evidence.
Fix: use a traceable transfer (wire, check, or verified electronic transfer) and keep receipts.
Mistake #2: The gift arrives late
If you wait until the week of closing, you’re begging for delays—especially with Miami timelines (HOA docs, insurance binders, appraisal conditions).
Fix: move gift funds early enough to season in the borrower account if needed, or follow the lender’s exact “at closing” transfer process.
Mistake #3: Undisclosed repayment (the silent fraud trap)
If the donor expects repayment (even “after closing”), it is not a gift. If underwriting suspects repayment, it becomes an undisclosed debt and can tank the file.
Mistake #4: Donor’s funds are borrowed
If the donor borrowed the money, underwriting may require extra documentation and may reject it depending on program/lender. The donor must generally show ability and acceptable sourcing.
Mistake #5: The “gift” comes from an unacceptable source
Conventional has donor eligibility rules and does not allow gifts on investment properties.
Trying to disguise someone else’s money as a “gift” for an investment purchase is where deals go to die.
When exceptions happen (and what “exception” really means)
There’s no magical waiver. Exceptions usually look like:
- more documentation
- more reserves required
- tighter underwriting review
- specific transfer method required
FHA recently clarified/expanded expectations around transfer timing and documentation in updates lenders implement into their overlays.
A simple “do it right” checklist
- Decide the loan type first (rules differ)
- Get the gift letter before the transfer
- Use wire/check/electronic transfer—avoid cash
- Keep donor proof + transfer proof + borrower deposit proof
- Don’t move money through multiple accounts “for convenience”
- Disclose everything early
For a related internal link that helps borrowers stop getting surprised by underwriting, you can interlink:
Bottom line
Gift funds are easy to use only when they’re clean. Underwriting doesn’t care about your intentions—it cares about the paper trail. If the trail is messy, your closing date becomes a suggestion.
