However, our mortgage lender will not approve us using someone else’s money, in gift or borrowed form, for the down payment.

So far, we know we can't accept gifts without putting that person on the mortgage too (which is not ideal for terms) and we can't use hard money lenders because they won't be in first position.

They could even gift extra money to you, so you control and manage it. 

Here is the advice for Realtors from National Association of Realtors.https://www.nar.realtor/fair-h...Instead of a letter....provide gifts.....that might make the seller happy.   

Mention how you really appreciate their support and give them a gift card to a coffee of the month club...this way every month their reminded.Mike

It was gifted through family.

Usually parent-child relationships would take advantage of the gift exemptions as much as possible as well.

or does this fall under the gift tax codes?

@Burke Fisher from what I’ve heard, and please correct me if I’m wrong, you can’t give an unlicensed person anything over 50$ for a referral fee, which must be given as a gift card (excluding bank cards) and anything over and your breaking Texas Real Estate Commission rules.

They want at least half of their money from gifts to go into those accounts- and the percent keeps growing.