NYC Co-op Gift Letter | Why Buyers Need To Document

August 10, 2025 by Nicole Fishman Benoliel

A gift letter is often necessary when submitting an offer for a co-op apartment in New York City. While not all listing agents require a gift letter as part of the offer documentation, it’s wise to prepare one in advance. This is important because you’ll need to include the gift letter in your co-op board package once you have a signed purchase contract.

What is a Co-op Gift Letter?

The purpose of a co-op gift letter is to provide written assurance to the co-op that any funds you receive from others to assist with your purchase are genuinely a gift, rather than a loan that would require repayment. Co-ops have stringent financial requirements for apartment owners, typically expecting a debt-to-income ratio of 25-30%. This is considerably stricter than banks, which usually allow a debt-to-income ratio of up to 43%.

Get Approved For An Apartment - NYC Co-op Gift Letter

If a buyer receives a gift that is actually a loan but falsely presented as a gift, it would lead to an understated debt-to-income ratio for the buyer. This situation contradicts the co-op’s preference for applicants with strong financial stability. They want to avoid the risk of non-payment of the monthly co-op maintenance fee, which supports the building’s operations.

Additionally, if a gift is a loan in disguise, it may expose the building to potential litigation and recovery actions from the lender, initially considered a gifter.

Do All Co-op Apartments Permit Gifting in NYC?

Not all co-op apartments in New York City permit gifting.

Each co-op building sets its own rules regarding purchasing arrangements, including gifting, co-purchasing, parents buying for children, children buying for parents, pied-à-terres, and guarantors. To find out if a specific co-op allows gifting, it’s best to consult the listing agent.

However, keep in mind that not all listing agents have the same level of expertise. A less experienced agent may not fully understand your question about gifting or might not provide the correct answer. Working with an experienced buyer’s agent can significantly simplify the process of understanding a co-op’s rules.

Your buyer’s agent can directly contact the co-op building’s managing agent to verify whether they allow gifting. If the co-op is self-managed, there is no managing agent available. In this case, your buyer’s agent, or the listing agent, should confirm the gifting policy directly with the board president, who is simply another apartment owner in the building.

What Is an Example Co-op Gift Letter for NYC?

Here is a clearer version of the text. Below is an example of text from an actual co-op gift letter. In most instances, the co-op building will not provide its own template. This means you can use your own wording to create the letter.

The most crucial part of a gift letter is the statement indicating that there is no expectation of repayment.

Dear XXX,

We, XXX, intend to gift $300,000 to our daughter, XXX, to be applied toward the purchase of the property located at XXX. There is no expectation or implication of repayment for this gift, neither in cash nor through future services, and we will not file a lien against the property. The source of this gift is HSBC Bank.

Sincerely,

XXXXX

When Must the Co-op Gift Be Deposited?

The gifter must deposit the co-op gift into the applicant’s bank account before submitting the board package. This step is essential because the co-op board will need to verify receipt of the gift. As part of the financial statement and supporting documentation for the purchase application, you must provide bank statements for several months.

It is advisable to highlight the line item that shows the receipt of the gift money. This will make it easier for the co-op board members reviewing your application to identify it.

Co-op Gift Letter Template for NYC

Co-op buildings typically do not have a standard gift letter template. However, each lending institution will provide its own version that you will need to use. To obtain one, you can contact your mortgage banker or mortgage broker. For the co-op board application, you can usually submit a copy of the same gift letter that you are using in your mortgage process.

Is There a Maximum Gift Amount for a Co-op in NYC?

The answer to this question varies depending on the specific co-op building in question. Even if you are receiving the full purchase price as a gift, most co-ops will still require the buyer to demonstrate sufficient income to meet the building’s debt-to-income ratio requirements.

In an all-cash transaction, since there is no mortgage loan, you will need to have approximately four times the monthly maintenance fee to maintain a 25% debt-to-income ratio.

For example, if the co-op’s monthly maintenance fee is $1,500, you would need a monthly income of $6,000, even if you are receiving a gift for the entire purchase amount.

Can a Gift Count Towards Co-op Post-Closing Liquidity?

Yes, while most gifts for cooperative apartment (co-op) purchases in NYC are used to fund the down payment, it is not uncommon for buyers to receive a gift to strengthen their post-closing liquidity. Post-closing liquidity refers to the amount of liquid assets a buyer has after completing the purchase, taking into account closing costs.

The rules regarding post-closing liquidity, including the required amounts and which assets qualify as liquid, can vary by co-op building. If a specific co-op does not outline its post-closing liquidity requirements, a conservative guideline is to have at least two years’ worth of monthly mortgage and maintenance payments in liquid assets.

If your financial situation is borderline for the co-op and you have the option to ask a family member for a gift, it’s wise to consider this.

Strengthening your financial position can enhance your chances of being invited to an interview with the board and ultimately receiving their approval.