Gift of Equity Calculator
Calculate gift of equity amount for family property sales. Determine the difference between market value and sales price.
How it works
Gift of equity = Market Value - Sales Price. It's the amount of equity "gifted" when selling below market value, often used as down payment credit.
Example
$400,000 market value - $350,000 sales price = $50,000 gift of equity that can count toward buyer's down payment.
FAQ
What is a gift of equity?
A gift of equity occurs when you sell property to a family member below market value. The difference between market value and sale price is considered a gift.
Can gift of equity be used as a down payment?
Yes, most loan programs allow gift of equity to count toward down payment requirements. Some restrictions apply depending on loan type and relationship.
Are there tax implications?
Yes, the seller may owe gift tax if the gift exceeds annual exclusion limits ($18,000 in 2024). Consult a tax professional for specific guidance.
What loan types accept gift of equity?
Most loan programs accept gifts of equity, including conventional, FHA, VA, and USDA loans. Each has specific requirements and documentation needs.
What documentation is required?
You'll need a gift letter, appraisal showing market value, and sometimes additional documentation proving the family relationship and transaction legitimacy.