Down Payment Options. Yes, there are options! Saving money for a down payment may seem like an impossible feat. You have bills to pay, the car breaks down at the most inopportune time, life happens! But I bet there are some options available for a down payment and closing costs that you may not be aware of!
Gift Funds~ Is there a relative that you can ask to help get you into your first home? Lenders will allow gift funds from a relative to cover both a down payment and closing costs! Depending upon the program you choose, all of the down payment and closing costs may be gift funds! The catch is the donor must be relatd. The relative must be able to show the ability to give the gift and the transfer of funds must be documented. You may also receive gift funds from a domestic partner or a non profit like your church. If you are considering getting a gift for down payment and closing costs, be sure and speak to your lender or agent to make sure the transfer is done in a way that will be acceptable to the lender.
Sell your stuff~ You may have items that haven't been used for a long time like
your wave runner, boat or dirt bike. These items may bring in a decent amount of cash to help pay a down payment. This too will need to be documented correctly. Proof that you owned the item, fair market value of the item and evidence of the sale. Be sure you make copies of the title and bill of sale. Talk to your lender or agent to make sure it is done properly. You may have antiques or high priced items to sell. These are a little trickier to document. Talk about it with a professional prior to selling these types of items to make sure they are able to be documented properly.
401(k)~ Many 401(k) programs will allow you to borrow against them with no penalty in order to purchase a home. Check with your 401(k) holder to find out the requirements.
Pay off Debt~ Maybe you have some debt that if you were not making payments on it would create instant savings for a down payment. The money you would save in interest payments to a credit card is money in your pocket!
Bond/Grant Programs~ There are bond programs available that are set up specifically to assist first time home buyers with down payment and closing cost assistance. Your city may have one available. FHA has a 
program in California called CHF Access that is a second trust deed specifically for down payment and closing costs. There are specific lender requirements for this program, so be sure to speak with your loan officer or agent to find out more.
These are some great options for you if you have been unable to save money for a down payment. Combine any or all of these! Throw in a credit from the seller for closing costs and you are on your way to owning the home of your dreams! Now is a great time to buy a home with interest rates being at all time lows and housing prices at an affordable level. Don't let a little thing like a down payment stand in the way of your owning your own home! Let's figure out how to get you there!
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Hi Stephanie, this is a lot of good timely advice, particularly for the first-time buyers who don't know of all the options they can put together to make something happen. Good work and have a great 2010.
Great advice for the potential "possibilities" available to a purchaser when looking to buy a home. Don't forget the VA loan which doesn't require a down payment at all.
Stephanie, most of the advises are great. The only one that I am a little concern would be to borrow against your 401K. That is for your retirement and you get hit with a stiff penalty for early withdrawal. Would suggest for the buyer to really think a few times over and consult with their accounts before making that move. All other advises would definitely help them out.
Thanks for pointing that out Song! I have actually ammended the post to include without penalty! There are actually provisions in many 401(k) that will allow for the money to be used without penalty for the purchase of a home!
Stepanie, you have put together a great blog with a lot of details that my buyers will find interesting as well. As far as the 401K, I used my years ago and of course the money I saved on the house tripled the penalty, in fact I forgot their was a penalty. But as in any process the Folks have to weigh what is best for them.