A sum of money given to a homebuyer for the purpose of helping them buy a home. A gift should always be documented by the borrower with a careful paper trail in order to be used by most underwriters as a qualifying asset. A paper trail would consist of a letter from gift giver (should be an immediate family member) stating that they are giving this gift for a specified dollar amount to the borrower and no repayment is required. The letter should also state gift giver's relationship with the borrower. It should be verified that the giver has the funds to give, either by showing a bank statement with sufficient funds to cover the gift, or with a copy of the gift check coupled with a bank deposit slip showing that the check has been deposited into the borrower's bank account. If the gift is a gift of equity, documentation would be proof that the giver had the property to give and owned it for at least 12 months. If they did not it for at least 12 months, the value of the gift is determined by the following: the lesser of the giver's original acquisition cost plus the cost of any improvements made (must be documented) or the appraised value, from which the loan amount must be subtracted. A gift of equity would also have to be written into the purchase and sales agreement.