Yes, FHA can allow the down payment to be gifted—but the donor and paper trail matter.
FHA permits eligible gifts for qualifying costs, including the borrower's required investment, when the donor is acceptable and no repayment is expected.
Who can provide an FHA gift?
Handbook 4000.1 permits gifts from defined acceptable sources, including eligible family members and other specifically permitted entities/sources. The lender must establish that the funds did not come from an unacceptable interested source disguised as a gift.
The gift letter
The file must contain the FHA-required gift documentation identifying the donor, relationship/source, amount and a statement that repayment is not required. The lender also documents transfer/receipt of the funds using acceptable evidence.
Gift of equity
A gift of equity is different from wiring cash. Under FHA's current rule, only family members may provide equity credit as a gift when selling property to other family members. The lender documents the relationship, gift amount and no-repayment terms.
Can a real estate agent give the buyer a gift?
Do not assume a payment is an eligible “gift” merely because someone calls it one. A party with an interest in the transaction can fall under interested-party contribution or inducement-to-purchase rules. The source and purpose must be analyzed correctly.
Official FHA policy baseline
Primary source: HUD/FHA Single Family Housing Policy Handbook 4000.1. HUD identifies it as the consolidated, comprehensive source of FHA Single Family policy; the current update was published August 12, 2026.