CalculatorGift of Equity Calculator
Calculate the gift of equity when buying a home from a family member below market value.
Gift of equity
$40,000
10.0% of FMV
Minimum down payment (3.5%)
$12,600
Gift covers minimum down?
Yes
Loan amount
$320,000
Est. monthly P&I
$2,022.62
Est. monthly PITI
$2,382.62
Includes ~1.2%/yr tax & insurance estimate
What Is a Gift of Equity?
A gift of equity occurs when a family member sells a home below fair market value. The difference between FMV and the sale price counts as the buyer's down payment with most lenders. FHA, conventional, VA, and USDA loans all allow gifts of equity from family members. The seller must provide a gift of equity letter at closing.
Gift of Equity Requirements by Loan Type
| Loan Type | Min Gift to Cover Down Payment | Who Can Give |
|---|---|---|
| FHA | 3.5% of purchase price | Family members |
| Conventional | 3%–20% depending on LTV | Family members |
| VA | Can cover funding fee | Family members |
| USDA | 0% down required | Family members |
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