Home Down Payment Options

Here is a question that I hear quite often:

Do I need to put 20% down to purchase a home?

The answer is NO; you don’t have to. The more you put down, the less risky it is for the lender. As a first-time homebuyer, it is tough to come up with that kind of money. Unless you are wealthy or you sold your house and buying another one, then you can use the proceed of the sale of your home as a down payment, other than that, it is hard to come up with 20% down nowadays.

Here are some Home Down Payment Options for you:

Crowdsource your Dream Home:  People uses sites like Kickstarter to fund creative projects so why not crowdsource your first home? Use site like Feather the Nest or HomeFundIt to raise your down payment!

U.S. Department of Housing and Urban Development-HUD:  U.S. Department of Housing and Urban Development-HUD:  Look into Government Options. The U.S. Department of Housing and Urban Development, or HUD offers a number of homeownership programs, search as  “Down Payment and closing cost Assistance” Of course, there are guideline to those programs as such income and location requirements, but your loan officer can go over all the different programs and see which one you could probably qualify.

HUD has a list of links by state that direct you to the appropriate page for information about your state.

You can also check “Help Buying A New Home.”  USA Government has a lot of programs to help First Time Homebuyers.

There is also FHA-insured mortgage:  under this program, if you qualify, the down payment is only $100;  you can even finance the closing costs.

Check with your city if they offer some homeownership help.

Check with Your Employer
Employer-Assisted Housing (EAH) programs help connect low- to moderate-income workers with down payment assistance through their employer. If you work for a participating EAH employer, you can apply for a loan of up to $8,000 for down payment and closing cost assistance, the guideline is different from one state to another.  In most case, the loan is interest-free and borrowers have 10 years to pay it back.  Ask the human resources or benefits personnel at your employer if the company is part of an EAH program.

Check With Your Lender:  Ask them about their Special Lender Programs for First Time Homebuyers.  People are unaware that many lenders offer programs to help people buy a home with a small down payment.

They have that the biggest misconception that they need 20% for the down to buy a house. There are a lot of programs out there that need a total of 3% or 3.5% down.

Conventional mortgage 3% down:  Now just a 3% down payment is needed. That’s even lower than FHA requires. … While the FHA loan has its benefits, it comes with high upfront fees and permanent mortgage insurance. The new conventional 97% LTV program is a safer bet for the future, requiring no upfront mortgage insurance fees and cancellable monthly PMI.  Ask your Lender!

Gift Funds: Sixteen percent of buyers ask friends or relatives to help jump-start their home ownership with a gift. You need to talk with your lender first to see if they allow Gift Funds and the maximum amount allowed.

Seller Concessions:  Yes that’s right, you can ask for the seller to help you with your closing cost!   Depending on the type of mortgage you get the lender allows sellers contribution.   For FHA mortgages, the cap is 6% of the sale price. For Fannie Mae-guaranteed loans, the caps vary between 3% and 9%, depending on the ratio between how much you put down and the amount you finance.  The cap varies also depending on lenders and programs.

Please talk with your real estate agent about this as it has to be part of the purchase contract for the lender to approve it.

See, there is hope for first-time homebuyer!

Any question, please feel free to leave them in the comment box below. 🙂




  1. Hi Carolle,
    It’s really strange that I have never heard about all of these options when I bought our first home in the US. No gift fund, no seller concession, no conventional mortgage were ever mentioned to me by my real estate agent. We had to empty our saving accounts to come up with a very high downpayment. Well, at least we won the bidding war and still love our house.
    I’m sure this information will help many first-time homebuyers to make better choices and save money

    1. Author

      Hi Mary, I was reading your comment and you were saying when you purchased your first home in the US. That could be the reason why you were not presented with all those options. If you purchased as a foreign national even if you were a first time home buyer, those options are not available with foreign national loans. Thanks for your comment, I really appreciate that!

  2. Hi Carolle! Great article. It is nice to see that first time home buyers still have options. When we bought we barely made it and home prices in my area have more than doubled since I bought it. If we were buying now we definitely would have to use one of the options above. Thanks for sharing!

    1. Author

      Hi Brian, Yep I have been there too as a first-time homebuyer…I don’t think that all those options were there for me at that time. So I want people to be aware that they have a lot of options now to buy their first home!

  3. Oh I am so happy I found your site because it’s hard to get real information on mortage options that isn’t from some mortgage company trying to sell you, you know? So I’m so happy you broke it all down. My son and daughter-in-law are starting to think about getting ready to buy their first home, so I’m going to direct them to this website. Thanks!

    1. Author

      Hi Babs, I have been in this business for over 22 years, not only as a real estate agent but freelance closer and mortgage broker 🙂 so I know what you mean! When they are ready to buy I can set them up with the top-rated agent in their area, just have them fill out the contact form in the contact tab. Thanks for your comment!

  4. I have been thinking a lot lately about buying a home. I think I heard that it’s not a buyers market now, but I do a research almost every day. I hope I’ll come across the ideal home to fit my style and of course the finance. No doubt these tips will come in handy. I did not know about seller concessions at all. That’s a good idea. As soon as I’m ready, I will contact a realtor for help. Thanks for sharing this info. I was reading an article about owner financing. Is this a reliable way to invest in a house?

    1. Author

      Hi Carol, yes seller concessions have been around, a lot of people are unaware of that. I have always tried to get my client seller contribution. Just make sure to check with your lender what is the max seller contribution that is allowed. Don’t forget, when you are ready I can get you the top-rated agent in your market, where ever you are!

  5. I just read this article and there is a lot of really good information in it.

    I’d like to mention that I’ve bought a house under a VA loan twice without having to put any money down.

    The other ideas, like crowd sourcing, I thought about, but never followed up. Overall, a very good article.

    Keep writing!

    1. Author

      Hi John, thanks for your comment, I really appreciate it! Come back for more reading 🙂

  6. Wow, this article points to a HUGE financial involvement as it deals with buying and selling a house.

    I have not experienced how it is done but from what you have shown, it seems a bit easier to go for such a transaction.

    You have not only shown the safer way of managing down payment and closing cost but also reliable sites to seek help.

    Thanks for sharing this useful information.
    I look forward to reading more updates in the near future.

    All the best.

    1. Author

      Hi Phomrong! I am glad you enjoy my article! Yes please come back for more reading! I really appreciate your comment. When you are ready to experience the road of ownership I can always guide you!

  7. What a great post and thanks for sharing the information.

    Sometimes you just don’t appreciate all the options available to you to get on the property ladder. The hardest part is always the down payment and dome top tips her so many thanks. I look forward to reading more of your posts.

    1. Author

      Hi Hannah! The road of first time ownership is very scary and confusing. I want to show people then even if you don’t have 20% to put down there is other avenues. Come back for more reading 🙂

  8. Thank you for sharing this article, gives a lot of information especially for new home buyers, I do not think that any of this applies to me as I live in the UK lol.

    Thank you again for sharing your knowledge, have a great day and all the success, happiness and health that you deserve and desire.

    Kind regards.


    1. Author

      Hi Dean! Thank you so much for reading my article and comment on it even from the UK lol. I really appreciate that!

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