Use 100% gift funds for your FHA down payment

Yes! FHA guidelines allow your entire 3.5% down payment to come from gift funds—you don't have to contribute any of your own money toward the down payment if you have a willing donor. This is one of the biggest advantages of FHA loans for Nevada first-time buyers who may not have saved enough but have family willing to help.

For example, on a $400,000 home in Las Vegas, the 3.5% FHA down payment would be $14,000. Your parents could gift you the entire $14,000 (plus additional funds for closing costs if needed), and as long as you properly document it with a gift letter and paper trail, FHA underwriters will approve it.

The only requirement is that you meet the other FHA guidelines—credit score, debt-to-income ratio, employment history, etc. The gift funds make up your down payment, but you still need to qualify for the loan based on your own income and credit profile.

FHA allows gifts from a wide range of acceptable donors. Family members are the most common: parents, grandparents, siblings, children, aunts, uncles, nieces, nephews, and cousins all qualify. Your spouse or domestic partner can also provide gift funds. Beyond immediate family, FHA also accepts gifts from your employer (subject to certain restrictions), labor unions you're a member of, close friends with a clearly defined and documented interest in you, charitable organizations, and government agencies or public entities that provide homebuyer assistance.

The key restriction is that the donor cannot be anyone involved in the property sale or transaction. The seller, real estate agent, listing broker, builder, developer, or anyone associated with selling you the property cannot provide gift funds. This prevents conflicts of interest where sellers might artificially inflate the price and give back money as a "gift."

In Nevada, many first-time buyers receive gifts from parents or grandparents. If your gift is coming from a close friend or employer, your lender may require additional documentation to prove the relationship and ensure compliance with FHA guidelines.

The documentation requirements for FHA gift funds include: (1) A signed gift letter stating the amount, donor/recipient names and relationship, property address, confirmation that funds are a gift with no repayment expected, and signatures from both parties. (2) Donor's bank statements showing sufficient funds available and the withdrawal of the gift amount. (3) Your bank statements showing the deposit of the gift funds into your account. (4) Transfer documentation such as wire transfer receipts, canceled checks, or electronic transfer confirmations.

The paper trail is critical. Your Nevada FHA underwriter needs to trace the money from the donor's account through the transfer and into your account, matching amounts and dates. If there are any gaps—like the donor withdrew $15,000 but you only deposited $10,000, or the dates don't align—the underwriter will ask for explanations or may not approve the gift funds.

Your lender will provide a gift letter template and guide you through exactly what's needed. Gather these documents early in the process to avoid delays. If your gift funds have been in your account for 60+ days before you apply, they may be considered "seasoned" funds and require less documentation.

Generally, no—you as the recipient do not pay income taxes on gift funds. Under federal tax law, gifts are not considered taxable income to the person receiving them. Nevada also has no state income tax, so there are no state tax implications for gift recipients either.

However, the donor may have gift tax reporting obligations if the gift exceeds the annual gift tax exclusion amount. For 2025, the IRS allows individuals to gift up to $18,000 per person per year without having to file a gift tax return. A married couple can jointly gift up to $36,000 per person. If your parents each gift you $18,000 (totaling $36,000), no gift tax return is required. If they gift more than that, they need to file IRS Form 709 (United States Gift Tax Return), but even then, they likely won't owe gift tax unless they've exceeded their lifetime gift tax exemption (which is over $13 million in 2025).

In practice, most FHA down payment gifts fall well below these thresholds. For a $400,000 Nevada home, the 3.5% down payment is $14,000—under the annual exclusion. One parent could gift the full amount without any tax reporting. Consult a tax professional if your gift exceeds the annual exclusion or if you have questions about the donor's tax situation.

Yes! FHA gift funds can be used for more than just the down payment. They can also cover your closing costs, prepaid expenses (like property taxes and homeowners insurance), FHA mortgage insurance premium (both upfront and monthly), and any other costs associated with obtaining the FHA loan.

This is especially helpful for Nevada first-time buyers who may be stretched thin on savings. On a $400,000 purchase in Las Vegas, you might need $14,000 for down payment plus $8,000-$12,000 in closing costs, totaling $22,000-$26,000 to close. If a parent gifts you $25,000, you can use it for both the down payment and closing costs, reducing your out-of-pocket expense to nearly zero (you may still need a few hundred dollars for earnest money deposit earlier in the process).

The same documentation requirements apply—gift letter, paper trail, and verification of donor funds. Just make sure the gift letter specifies the total amount being gifted and that it will be used for down payment and closing costs. Your Nevada FHA lender will guide you through this.

You can receive gift funds either before you apply for the mortgage or during the loan process—both work, but the timing affects documentation requirements. If possible, the ideal scenario is to receive the gift at least 60 days before you apply for your FHA loan. Funds that have been in your account for 60+ days are considered "seasoned" and require minimal documentation. The lender will see them on your bank statements as your own funds and may not even require a gift letter (though it's still good practice to mention they were a gift).

If you receive the gift during the loan process (after you've applied or while underwriting is happening), it will show up as a large deposit on your bank statements. The underwriter will question any large deposits and you'll need to fully document the gift—gift letter, donor's statements, transfer receipts, etc. This is completely acceptable and common; it just requires more paperwork.

Many Nevada buyers receive gifts once they're under contract on a home, because that's when they know exactly how much they need. This is fine—just work closely with your lender to ensure all documentation is provided quickly to avoid delaying your closing. If your family has already committed to helping and you're planning to buy soon, ask for the gift early and let it season in your account for a smoother process.

Absolutely. FHA has no limit on the number of gift donors you can have. You could receive $5,000 from your mother, $5,000 from your father, $3,000 from your grandmother, and $2,000 from your sibling—totaling $15,000 from four separate donors. Each donor would need to provide their own gift letter and documentation, but FHA allows combining multiple gifts to meet your down payment and closing cost needs.

The documentation gets slightly more complex with multiple donors because you need gift letters from each person and paper trails showing each separate transfer. Your lender will track each gift individually. If your mom sends $5,000 and your dad sends $5,000, provide two gift letters, bank statements from both of them showing the withdrawals, and your statements showing both deposits.

In Nevada, it's common for multiple family members to chip in to help a first-time buyer. Just keep your lender informed of how many gifts you're receiving and from whom, so they can prepare the correct documentation requests and ensure everything is properly tracked through underwriting.

Yes, FHA allows gift funds from donors outside the United States, but the documentation requirements are stricter. If your parent or family member lives abroad and wants to gift you funds for your Nevada FHA loan, they can wire the money to your US bank account. You'll need the same core documentation—gift letter, proof of the donor's funds, and transfer documentation—but you may also need additional items.

For international gifts, be prepared to provide: foreign bank statements from the donor (translated to English by a certified translator if not already in English), wire transfer receipts showing the international transfer, explanation of the donor's relationship to you and reason for the gift, and possibly proof of the donor's income source or occupation. Your lender may also have additional requirements to satisfy anti-money-laundering regulations.

The key is to be proactive and transparent with your Nevada FHA lender about the international gift. Give them as much documentation as possible. International gifts are completely acceptable under FHA guidelines—the underwriter just needs to verify the legitimacy and source of the funds, which takes a bit more work when the donor is outside the US. Allow extra time in your loan process for this documentation to be reviewed.