Can My Parents Gift Me a Down Payment to Buy in Woodland Hills?

Jonathan Lopez, Woodland Hills Realtor | Jim Sandoval Group | CA DRE #02282844 · Updated September 2026

For a lot of first-time buyers looking in Woodland Hills, the down payment isn't the obstacle their own savings can clear, it's a gap family wants to help close. The good news is that gifted down payments are common and fully allowed by every major loan type. The part buyers usually get wrong isn't whether it's allowed, it's what their lender is actually going to require before that money can touch the deal.

The Rules Are Different by Loan Type

For a conventional loan (the kind backed by Fannie Mae or Freddie Mac) with less than 20% down on a primary residence, the entire down payment can come from gift funds, with no minimum contribution required from the buyer's own money. The catch is who's allowed to give it: at that loan-to-value level, the gift generally has to come from a relative, meaning a spouse, parent, grandparent, sibling, domestic partner, or fiancé or fiancée. Gifts from a non-family member are typically only accepted once the buyer is putting down 20% or more, which ties back to the broader myth that 20% down is required at all. FHA loans work differently and more flexibly: up to 100% of the down payment or closing costs can be gift funds, and the list of acceptable donors is wider, including family members, a close friend with a clearly documented relationship, an employer or labor union, or a charitable organization. FHA's flexibility here pairs with its other buyer-friendly terms, including lower minimum credit requirements.

What the Lender Actually Asks For

Every gift, regardless of loan type, needs a signed gift letter. It states who's giving the money, their relationship to the buyer, the exact amount, and a statement that it's a gift with no expectation of repayment, not a disguised loan. Alongside that letter, the lender wants a documented paper trail: bank statements showing the money leaving the giver's account and landing in the buyer's, so the underwriter can verify where it actually came from. If the funds have already been sitting in the buyer's account for more than 60 days before the loan application, that seasoning period usually satisfies the source-of-funds requirement on its own. If it's more recent than that, expect to provide the giver's bank statements too, not just your own.

The Tax Question That Scares People More Than It Should

Buyers often assume that once a gift crosses some IRS threshold, someone owes tax on it. In 2026, each person can give up to $19,000 to any one recipient without needing to file a gift tax return at all, which means two parents can give a combined $38,000 to one child with zero paperwork. Even gifts above that annual amount don't typically trigger actual tax owed. Anything over $19,000 per giver just requires the giver to file IRS Form 709 and gets counted against their lifetime gift and estate tax exemption, which sits at $15,000,000 per individual in 2026. For the overwhelming majority of families, that lifetime exemption is nowhere close to being used up by a home down payment gift, so the practical result of exceeding $19,000 is a form to file, not a check to write.

What This Looks Like on a Real Woodland Hills Purchase

Woodland Hills' current median sale price is $1,348,500 (Movoto, updated September 7, 2026). A first-time buyer using an FHA loan at the 3.5% minimum down payment would need roughly $47,200 down. Two parents each gifting the 2026 annual exclusion amount of $19,000, for $38,000 combined, would cover about 80% of that FHA minimum down payment without either parent needing to file a single tax form. A buyer using a conventional loan with a smaller down payment, in the 5 to 10% range, would need a larger total gift, but the same family-donor and documentation rules apply either way, and a strong credit profile keeps the rest of the financing terms competitive.

The Other Version of This: Buying Directly From a Relative

If you're purchasing a home from a family member rather than a stranger, there's a second mechanism worth knowing about: a gift of equity. This happens when a relative sells you their home for less than its appraised value, and the difference between the appraised value and the actual sale price counts as your down payment, without any cash changing hands at all. For a conventional loan, eligible donors are defined broadly (a spouse, domestic partner, legal guardian, or anyone related by blood, marriage, adoption, or legal guardianship). FHA is narrower, limiting gifts of equity to a spouse, child, parent, grandparent, or other defined relative. Either way, it still requires the same gift letter and documentation as a cash gift, and the same $19,000 annual exclusion and $15,000,000 lifetime exemption rules apply to the seller, since they're the one giving up value. This isn't a common scenario, but it's worth knowing if a Woodland Hills purchase is happening within a family rather than on the open market.

Gifts Can Be Layered With Assistance Programs, Not Just Used Alone

A family gift doesn't have to be the only source of down payment help. Programs like CalHFA's MyHome Assistance Program, which offers a deferred-payment second loan toward down payment and closing costs, can generally be combined with gift funds on the same purchase, since they cover different parts of the transaction rather than competing for the same dollars. That combination matters most for buyers who are close to covering an FHA or conventional down payment but not quite there. A lender can confirm which specific programs stack together for your loan type, since not every assistance program allows every pairing. A buyer's own retirement account is another piece that can stack in: the IRS allows a $10,000 lifetime penalty-free IRA withdrawal for first-time buyers, $20,000 for a married couple, on top of whatever family and assistance-program funds are also in play.

What to Do Before You Ask for the Gift

Talk to your lender first, before the money moves. Confirm which loan program you're using, whether the specific donor qualifies under that program's rules, and exactly what documentation the underwriter will want to see. Have the giver keep the transfer simple and traceable (a single transfer or check, not several smaller ones) and get the gift letter signed at the same time the money moves, not weeks later when the details are harder to reconstruct. A CPA can confirm anything specific to a larger gift or a giver's own tax situation, and once the financing side is lined up, I can help make sure the offer itself is competitive for what Woodland Hills' current market actually calls for.

Frequently Asked Questions