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Family Money and Homebuying: The Rules Every Las Vegas Buyer Should Know
- Arlie Janet Bagongon
- Sep 10
- 3 min read
Written by Kimberly Smith - Your trusted Las Vegas Real Estate Queen
Buying a home in Las Vegas is an exciting milestone — and for many buyers, family members want to help make that dream possible. Parents may offer gift funds, siblings may pitch in, or relatives may step forward to cover part of the costs.
But here’s the catch: not all money is treated the same in the eyes of a lender. If the rules aren’t followed, family help can slow down — or even derail — your home loan approval.
Here’s what every smart buyer (and their supportive family) needs to know about gift funds, loans, and closing-cost helpin the Las Vegas real estate market.
How Family Can Help in Homebuying
Most buyers know family can help with a down payment. But family money can often cover closing costs too.
Typical uses:
Down Payment Funds — The most common use of gifts.
Closing Costs — Title, escrow, lender fees, and prepaids (taxes/insurance).
Reserves — Usually not allowed from gifts. Lenders typically want required cash reserves to be your own funds.
The key is proving the money is truly a gift — not hidden debt.
Gift Rules Lenders Require
If you’re receiving funds from family (or other allowed donors), expect your lender to document:
Gift Letter — Names/relationship of donor and borrower, amount of the gift, account info, and a clear statement that no repayment is expected.
Proof of Transfer — Paper trail showing the donor’s source of funds and the receipt by the borrower (bank statements and/or wire confirmations).
Allowed Donors —
Conventional: Relatives by blood, marriage, legal guardianship, domestic partner, fiancé/fiancée.
FHA/Some programs: May also allow a close friend with a documented relationship, or approved employers, government agencies, or charities.
Not allowed: Any party to the transaction with a financial interest (e.g., seller, builder, real estate agent, lender).
Real Estate Queen Tip 👑: Surprise wires can stall underwriting. Loop your lender in before anyone moves money.
When a “Gift” Is Actually a Loan
Know the difference:
True Gift ✅: No repayment, clear documentation, full paper trail.
Loan ❌: Any expectation of repayment, side agreements, or untraceable cash.
Why it matters: Lenders count loans as debt, which can increase your debt-to-income ratio and jeopardize approval. Mislabeling funds risks delays or denials.
Minimum Borrower Contribution (Important!)
1-Unit Primary Residence (many Conventional loans): The entire down payment can be gift.
Multi-Unit, Second Home, Investment: Lenders may require a portion of the down payment to be your own funds. Ask your lender early so you plan correctly.
Common Mistakes to Avoid
🚩 Large Cash Deposits — If you can’t document the source, they may be disallowed.
🚩 Last-Minute Transfers — Late movement of funds often creates underwriting delays.
🚩 Unqualified Donors — Friends/coworkers typically don’t qualify unless the program explicitly allows it and you can document the relationship.
🚩 Interested-Party “Gifts” — Money from the seller, builder, or agent is not a gift and is restricted under separate rules.
Bonus: Tax Note
Large gifts may require the donor to file a gift-tax return depending on the annual exclusion limits. This doesn’t affect your mortgage approval, but it’s wise for the donor to consult a tax professional.
Why Expert Guidance Matters
Family help can be the difference between renting and owning — but only if it’s handled the right way.
That’s where having a Realtor who understands both real estate contracts and mortgage rules comes in. From advising on gift letters to coordinating with lenders, I make sure family contributions are an asset — not a liability.
👑 Real Estate Queen Tip:“Family help is powerful — but only when it follows the rules. With the right prep, gift funds can speed you into your new home instead of slowing you down.”
Final Thoughts
If your family is stepping in to help with your Las Vegas home purchase, know the rules before the money moves. Proper documentation keeps your loan on track and your closing stress-free.
Looking for clear guidance on gift funds, closing costs, and financing strategies? I’ll walk you through every step with my 5 Star Approach — Quality, Understanding, Excellence, Efficiency, and No Nonsense.
Disclaimer: Loan program rules are subject to change, and lenders may impose their own additional overlays. Always confirm specifics with your lender.
👑 Kimberly Smith is a top Las Vegas Realtor known for her sharp market insight, strategic approach, and commitment to helping clients move smart—whether buying, selling, or just exploring what’s next. She’s not just a local expert—she’s The Real Estate Queen of Las Vegas.
📞 Connect with Kimberly:📍 Serving Greater Las Vegas | 🏡 Luxury + Residential
📲 702-706-5885
📱 Follow on Instagram: @realestatequeenoflasvegas
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