Do I have to disclose a parent's gift?

Having generous parents is nothing to hide. An estimated one-third of first-time buyers purchase their home with a loan or a money gift from their parents.
Lenders will ask for a gift letter stating that no repayment of the "gift" is expected. In addition to the letter, a lender can ask for two or three months' worth of statements for the account where the down payment funds are located.  If the money was recently placed into that account, the lender may ask where it came from and request verification of that source as well.
Resources:
* "The Homebuyer's Survival Guide," Kenneth W. Edwards, Dearborn Financial Publishing, Chicago; 1994.

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