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 a piece of legal, written correspondence explicitly stating that money received isn't expected to be repaid.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. Only certain gifts can be used for your down payment. Gifts can only come from family members or friends who have a close relationship with you. A gift letter must include the amount being gifted and state that no amount of the gift is expected to be repaid under any circumstances. A gift letter for a mortgage is proof to the lender that money you've been given for your home purchase is a gift, not a loan to be repaid. Yes, your gift letter needs to be notarized. Also, both the donor needs to sign it to make it valid.