...cash flow income from server tips are a common item ...as long as your IRS tax forms, pay stubs and bank deposits do not show evident conflicts, it shouldn't be a problem ...if there are any, the uw will ask for a LOE but thats a common occurrance and nothing to worry about.
...as for the gifting, if your parents are comfortable with it, you can ask them to deposit most of it well in advance ...afaik the lender is only going to pull the last 2 mts of your bank statements ...any prior deposits won't show ...just be sure of your bank's statement dates ...that eliminates any "whose money is it issues" ...else SO10 provided the correct answer ...its a bit more complicated but your LO should be very familiar with the requirements and how to process them ...hth
I come from the school of thought that the gift letter should be the mechanism used to transfer the gift funds. It is easy too. Your parents have to show they actually have the funds in their account to your lender, they sign a standard form gift letter for the down payment (or any gift funds) and transfer the funds to the title co just before closing - usually the day before. The title co sends in a copy of the incoming wire and you are done - easy peasy.
The way the Lemmus mentions you would need to have the funds in your accounts over 60 days (min) to show two months worth of bank statements with the funds in your account. It will satisfy the 5% of your money issue because you will be able to show it is your money since it has been sitting in your account for 60+ days. It may be easier for you to do it this way but some parents are not comfortable doing it using this method. This is a point of discussion for you and your parents to figure out the best method to satisfy both the lender and the grantor of the gift. 
The answer to your first question, is no. 5% is correct. I would have good records of all of these transactions. They will most likely want to see them. Rule of thumb is never, ever deposit cash (unless you have proof), don't open any cc's or buy a car, etc. The broker or one handling your mortgage app should tell you all you need to do. Believe me, we made a couple mistakes and deposited cash and had to show proof of it. It's just a PITB but you can manage. We just stopped putting any cash into the bank. Only direct deposits from work. And had our "home" money just sit there just before closing. We had an excellent broker & title agent. All things went quickly at closing. Good luck in your new home. 
@Anonymous wrote:The answer to your first question, is no. 5% is correct. I would have good records of all of these transactions. They will most likely want to see them. Rule of thumb is never, ever deposit cash (unless you have proof), don't open any cc's or buy a car, etc. The broker or one handling your mortgage app should tell you all you need to do. Believe me, we made a couple mistakes and deposited cash and had to show proof of it. It's just a PITB but you can manage. We just stopped putting any cash into the bank. Only direct deposits from work. And had our "home" money just sit there just before closing. We had an excellent broker & title agent. All things went quickly at closing. Good luck in your new home.
^^^Sandi - it is different for different loan types. it is 5% if it is a conventional loans only. And yes, 100% can be gifted with an FHA loan. I know this to be true 100%. Now, it is possible a lender might have an overlay for the FHA loan gift but in 35 years i have neve seen that particular overlay on gift funds. It is one of the clear benefits to an FHA loan.
I have no knowledge of gift funds (unless someone wants to give me a nice gift,I close on June 29th) but to the other point, I do have first hand knowledge. I am a bartender, And some 97% of my earnings are cash. My USDA coordinator understood that, and basically she just asked me to make sure my bank deposits were within pay periods. ie my reported tip earnings for a period were 1000. Put whatever was going in the bank from that pay period in within that period or the next couple days. Basically NOT do what I normally do and pile up 3 grand and deposit it all at once in a pay period where I showed 800 in tips. Fortunately I havea delightful little local bank right down the street that is open 7 days a week, so not terribly inconvienient. I basically just got in the habit of making all of my reported tips go into the bank, and using credit cards for everything, paying before the statement cut. Maybe keep a bit of cash for silly stuff, but damn near all of it goes in the bank. Its sort of a pain, but I have earned a significant amount of cash back this way, and I know exactly what comes in and goes out (though I had gotten pretty good about tracking anyway.)
Once I close I will go back to not being a nut about running to the bank, but for now its not really a huge hassle. And if your husband is like me and piles up quarters don't make an absurd deposit I had almost 3k in quarters so I used coinstar for amazon gift cards and started buying things I need for the house. No fee if you get amazon home depot, best buy or some other gift cards. Just be aware you can only get 1k at a time, which shouldnt be a problem for most people...