A cash gift for a down payment refers to money provided by a family member or an approved donor to assist in the purchase of a home.

When individuals receiving a cash gift use it for a down payment, lenders require a cash gift letter. This letter includes information about the person giving the gift, the recipient of the gift, the amount of the gift, and a declaration stating that the money is not a loan. Most first-time buyer mortgages and programs permit the use of cash gifts.

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