Buying a home
Using a Down Payment Gift From Someone Overseas
Short answer
A gift from someone living overseas may be usable for a mortgage, but the donor, loan program, source of funds, and transfer documentation all need review. Confirm the requirements before moving money or relying on the gift for your closing.
Chris Lamm, NMLS# 209221Published Last reviewed
Confirm that the donor and loan permit a gift
Fannie Mae allows qualifying personal gifts for eligible principal-residence and second-home loans, subject to donor and contribution rules. Personal gifts are not allowed for investment-property loans under that policy.
A donor’s overseas address alone does not answer the eligibility question. Tell the lender the relationship, country, bank, amount, and intended transfer method so the actual requirements can be checked.
Document the gift and the complete transfer
The lender needs the required gift documentation and evidence supporting the transfer. Funds described as a gift cannot have an undisclosed repayment obligation.
Keep the relevant account and wire records and ask what translations or currency-conversion evidence will be needed. Avoid routing money through several people or accounts merely to make it appear domestic. A clear paper trail is more useful than extra transfers.
Keep tax reporting separate from mortgage approval
A lender accepting gift funds does not settle your tax-reporting responsibilities. The IRS requires reporting for certain foreign gifts and bequests, and other international reporting rules may also apply.
Ask your tax adviser about the actual donor, amount, and tax year. Do not assume that a gift is free of reporting obligations because no tax was withheld when the wire arrived.
Before the donor sends funds
- Have the lender confirm donor and loan-program eligibility.
- Request the exact gift-letter and account-document checklist.
- Confirm receiving-bank and closing-agent wire instructions independently.
- Discuss applicable foreign-gift reporting with your tax adviser.
Sources and program details
These references support the program details discussed above. The program selected for your loan and its current requirements control your application.
Questions about this guide
Does an overseas gift need to sit in my account for a fixed period?
Do not assume a universal seasoning rule. Confirm the program’s source and transfer documentation before sending the funds.
Can I use a gift on any investment-property loan?
No. Fannie Mae’s personal-gift policy excludes investment properties. Other financing would need its own verified rules.
Written by Chris Lamm
Senior Loan Advisor and Branch Manager, MortgageOne Inc. NMLS# 209221. 25 years in mortgage lending, 6,000 families served.
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