🎁 Gift of Equity Calculator
Calculate the gift of equity when a home is sold to a family member below market value, and see the resulting effective down payment.
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What is a Gift of Equity?
A gift of equity occurs when a home seller, often a family member, sells a property for less than its fair market value. The difference can typically be used by the buyer as part or all of their down payment.
The Formula
Gift of Equity = Fair Market Value – Actual Sale Price. Effective Down Payment = Gift of Equity + any additional cash down payment the buyer contributes, expressed against the home’s market value.
Note: Lenders have specific rules for documenting gifts of equity; this tool is for general educational and planning purposes only, not lending or legal advice.
Last reviewed August 2026