Down payment funding alternatives

You might think coming up with a down payment is an impossible task.  However, you can tap into several sources for help with this part of the home-buying adventure.

Using a gift for your down payment
Family members or other folks with a close personal relationship to you can help with a gift.  There are specific gift letter forms we must use, and the actual donation must be tracked.  Please don't start transferring funds before talking with a licensed mortgage loan officer though.  FHA and VA loans have no minimum cash investment rules, but Conventional (Fannie Mae/Freddie Mac) loans usually require the first 5% down come from you, unless the gift is 20% or greater.

Down payment assistance programs from government sources

Many cities have down payment assistance programs, such as the San Antonio HIP program.  There are income limits and home buyer education class requirements.  Again, you should consult with your licensed mortgage loan officer for local guidance.

The State of Texas usually offers bond programs through the Texas Department of Housing and Community Affairs.  Again, there are some income guidelines, and they limit participants to First Time Homebuyers (unless in Targeted Areas).  Upon reselling the property, you might have to pay some "recapture" to the state for possible profits. 

401K Loans

If you participate in a 401k program through your employment, you often have the ability to "borrow" against your own funds.  Payroll deductions each month would repay that loan. . .to yourself!  We would consider this a "secured loan," and not be required to count the debt in your qualifying ratios.

Cash value in life insurance

Borrowing against your cash-value would result in a secured loan, and an acceptable source of down payment.

Zero down mortgage loans

VA Mortages

Service persons and veterans can qualify for a VA Loan that requires no down payment.  Please read our page on VA loans for more details.

100% USDA Home Loans.

These are available in areas all over Texas, but not those urban in nature.  Please visit our USDA page for more information.

These are just a few sources for down payments, and you can contact us to discuss your personal situation in more depth.  There is no cost for this consultation, and we promise not to pester you after your inquiry.  barbara@directionsequity.com