Financial Gift for Down Payments

Can I use a financial gift from a friend or relative as a down payment when buying a home? Yes. In fact, 1 out of 4 first-time homebuyers uses a gift to make the down payment. Tax law allows gifts of up to $14,000 a year without tax consequences to the giver or recipient. (The amount is adjusted annually so check IRS.gov publication 950 for the current figure.) You could get a gift from two parents or two friends (for $28,000) without the givers paying a gift tax. Using a gift for a down payment helps you buy a home even if it’s not Federal Housing Administration (FHA)-approved. The best advice is to contact a knowledgeable REALTOR® and discuss this subject before you start looking. Gifting a down payment will make a difference that will last a lifetime. There is no better investment than owning the house you live in.