Using Gift Funds from Parents in India to Buy a U.S. Home
Learn what lenders commonly need to document a down-payment gift from parents in India and which cross-border tax questions to flag.
Tell the lender before the transfer
Loan programs differ on eligible donors, minimum borrower contribution, documentation, and timing. Obtain the lender's instructions first so the donor does not send funds in a way that breaks the audit trail.
- A signed gift letter identifying the parties, amount, property, and no-repayment intent
- Donor statements or other evidence showing the source
- Wire or remittance records documenting the full path
- Proof the funds reached the borrower's account or closing agent
- English translations when requested
A gift cannot be a hidden loan
If parents expect repayment, the lender must evaluate the obligation as debt. Side agreements can invalidate underwriting representations. Decide whether the contribution is a gift, loan, or ownership investment, then document it consistently with the lender and closing attorney.
Foreign-gift reporting deserves professional review
The IRS says a U.S. person generally reports aggregate gifts exceeding $100,000 in a tax year from a nonresident alien or foreign estate on Form 3520. Different, inflation-adjusted thresholds apply to gifts from foreign corporations or partnerships. Reporting is informational but late or inaccurate filing can bring penalties.
Indian remittance and tax rules may also affect the donor. Have U.S. and Indian tax professionals review the transfer; this guide is not tax advice.