: Do banks accept a large gift to me as a valid down payment for a house? When I bought my house at the height of the bubble seven years ago, I remember having a conversation with a loan officer about the source of down payment

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The gift issue, as explained to me by the mortgage officer at our credit union, is that they look at the average balance of your checking/savings accounts of the 3-6 months prior to mortgage issuance date.
They look at the average balance to make sure you are financially stable beyond what your income and credit score indicate.
An example with numbers:

0k house
k down payment (10%)
00 current 3 month average balance of checking account
k current actual balance of checking account (includes k gift from dad last week)

With an average balance of 00, the bank will (reasonably) presume you CANNOT make a k down payment.
Now, let's extend the date by 3 months:

,500 current average balance
k current actual balance

By not "using" the k gift-from-dad, you're showing the bank that you're more financially stable than if it came in and went right back out: that looks like you're a free spender, and it will cast doubt on your willingness/ability to repay the loan.
How better use a gift:
Presuming your average balances are already "ok", the best way to utilize the gift-from-dad is in one of the following manners, in my opinion:

invest it into something making more than the mortgage costs
take small amount from it over the course of a year or two and make additional/bigger mortgage payments
leave it in your emergency fund account, and hold onto it

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Banks worry that the large gift might be a loan that is ultimately expected to be repaid. If so, that affects the cash flow of the recipient, and makes it more difficult to make the mortgage payments to the bank.

In some cases, of course, it is an informal loan: Dad advances a large $X to son to use as a downpayent, but does not charge interest and the expectation is that the money will be returned in smaller chunks as and when the son can afford to repay Dad.

In some cases, Dad truly means it as a gift, but son feels an obligation to repay the money, if not explicitly, then by paying for the first few months of Dad's nursing home stay, etc. So, banks like to have an explicit document such as a copy of a letter from Dad saying that this money is a gift, and some assurance that this is on the up and up.

If the amount is larger than the maximum gift that can be given each year without having to file a gift tax return, then some assurance that a gift tax return will be filed is helpful. Mentioning this in the letter is good: it indicates that there are no secret handshakes or secret agreements to the effect that this is in fact a loan, with or without regular repayments.