Yes, all lenders will require a gift letter. Although you may have the funds, the lender needs to confirm that you won't have to repay the gift.The letter must explain who is gifting the money, where the donor's funds are coming from and the relationship between the donor and the recipient. A gift letter is an important, formal, legal piece of documentation that can help explain that a (usually rather large) sum of money was gifted to you. Yes, your gift letter needs to be notarized. Also, both the donor needs to sign it to make it valid. What should the gift letter include? Gift funds are an excellent option for Consumers who are short of the funds needed to purchase a home. Most loan programs allow for the use of gift funds. A gift letter from the donor to the recipient, detailing the amount gifted and its intended purpose.