Can my family give me the money for a downpayment on a home purchase in Massachusetts?
Absolutely! As a matter of fact, anyone can give another person – family or not – up to $13,000 per year without having to file a gift tax return. This means that mom and dad can jointly give you up to $26,000, or jointly give you and your spouse up to $52,000 for your downpayment with no additional tax filing requirement. Any amounts in excess of these annual limits requires the filing of a gift tax return.
If you’re financing your mortgage and receiving some or all of your downpayment as a gift, your lender will need to know the details. At the very least, you’ll need to provide your lender with:
- A signed gift letter from your donor (the person giving you the money) that confirms the amount of the gift , and that this amount is indeed a gift and not a loan to be repaid.
- A copy of the bank statement for the account that was the source of the gifted funds.
Even though the IRS says anyone can give you gift money, if you’re applying for a FHA, VA or Mass Housing loan, the gift money must come from a family member. Each lender’s requirements may vary slightly, so be sure to check with your lender for specific requirements.
To find out more about how we can help your Massachusetts real estate closing go smoothly, please contact The Law Offices of Joshua Blumen,
P. C. at 781-784-2500.