How do I raise 5% down?

Asked by Josiah, Denver, CO Sat Jan 12, 2008

My family and I are trying to purchase a new home but we don't have any money to put down. How can we come up with a 5% down payment? (5-7k)

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Jim Cavoto, Agent, Denver, CO
Sat Jan 12, 2008
I assume that you are trying to do an conventional loan, like a "Flex 95" from Fannie Mae, if this is the case you are limited to gifts and money you can raise by saving the money. (401k etc)

Roberta indicated that an FHA loan might be a way to go, and I agree. If you will qualify for an FHA that would be the way to go. FHA loans are also easier to get in this martket. FHA would only require you to put down 3% and there are programs in Colorado that will lend you that money with little or no payments if you hit the income requirements.

There is "CHFA " They will lend you 3% (up to 10k) for an FHA or conventional loan in the form of a silent 2nd. What this means is there is a lien on the home, but you dont make any payments until you sell or refinance. The link is for the income and loan max information.…

"Auorora Hope" & "CHAC" have programs that work like CHFA.

Del Norte - has a grant & Loan programs up to 10k

Plus Nehemaih & AmeriDream both are still good to use until 2/29/2008 with these programs a "non profit will give you the 3% down, and the seller donates the same amount to them after closing (plus a small transaction fee). These programs are ending due to a FHA guideline change but can be used before 2/29/2008.

FHA even has a $100 down program if you buy a HUD home for the starting bid price.

In any case you have a lot of options that you can look into. A good Real Estate Agent working with a good FHA approved lender should be able to get you into a home with little or no down, with one of these programs.
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2 votes
Roberta Murp…, Agent, Carlsbad, CA
Sat Jan 12, 2008


1. Cash values in a life insurance policy?

2. A gift from relatives.

3. A 401K loan.

4. Sell some collectibles or other values.

5. Seek a loan program (FHA or Acorn) that requires less down payment.

--Or a combination of any of the above! For additional information about the low-down Acorn loan, click the link below:
1 vote
Brandi & Dus…, Home Buyer, Firestone, CO
Sat Jun 21, 2008
Hi Josiah,

Working with Ian R. Bennett at Mutual Security Mortgage was an answer to my husband and I. We had been working with at least 3 agents and other lenders who were full of it and trying to take advantage of my husband and I because we are young. However, I am not naive, I know a lot. Two years later, after finding Ian Bennett, he referred me to an agent who would take care of us. Janie Henry-Bolger with Keller-Williams is a fantastic agent and will go the distance to make sure you are getting a good deal. I am thankful for Ian and Janie being honest and willing to help people all agents and lenders should be.
Within a month of working with Janie Henry, we are ready to close on the 30th with only paying for our inspection and earnest money that we are expecting at closing. I never thought it could be so simple....until now. They are the best and most honest I've seen! If you're iffy with your credit and such, Ian can work wonders and get you in touch with the right people to help you, as well. All I can say is, Ian and'll be in perfect hands and in YOUR NEW HOME in no time. :)
0 votes
Sean Cochran, Mortgage Broker Or Lender, Naperville, IL
Thu Jun 19, 2008
Josiah. FHA loans allow for a gift of 5%. If the seller is willing to gift those funds to you, that is going to be a great bet for you. Find a local mortgage broker that specializes in FHA loans. Then, talk to your Realtor. See if the seller is willing to gift you those funds. I did a loan for my best friend recently here in Illinois. The home had been sitting on the market for about 149 days. When he made his offer, we stipulated that we needed 3% for fees and costs and 6% for down payment. The seller agreed. My buddy came to the table with no $$. Actually, he ended up getting his earnest money back.
0 votes
Kristal Kraft, Agent, Greenwood Village, CO
Wed Jun 18, 2008
Depending upon your income you might be able to qualify for bond or grant assistance. Some programs do not require repayment if you live in the home for a specific amount of time.
0 votes
NonRealtor, , 23456
Tue Jun 10, 2008
Keep saving your money. If you can save $1000 per year, after 5-7 years, you will be ready to buy a house, and house prices will be even lower.
0 votes
Tracy Howard, , 80022
Tue Jun 10, 2008
Hi , Josiah,
Flagstar Bank has a new 100% financing arrangement to help stimulate the sale of their real estate portfolio properties. If you are interested in this program, give me a call at (303) 995-4157 and I can explain it to you and tell you the locations of their properties.
0 votes
Debt Free Da…, , 85260
Sat Jun 7, 2008
You can use the ameridream down payment assistance program.…
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0 votes
Merritt Noel, , Denver, CO
Wed Apr 9, 2008
Hi Josiah,

Gift from family is allowed only on FHA loans. Conventional loans do not allow for gift funds.

Verification of the source of gift money is not required. However, it is necessary that the gift funds be deposited in the borrower's bank or savings account, or in an escrow account, prior to underwriting approval. Proof of deposit is required.

Gift donors are restricted primarily to a relative of the borrower. They can also be certain organizations, such as a labor union or charitable organization. I am senior mortgage consultant here in Denver and we are FHA approved if you would like to discuss your options in more detail.
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0 votes
Pam Winterba…, Agent, Danville, VA
Wed Jan 30, 2008
How about a gift from family.
0 votes
Jim Welden, Agent, Greenwood Village, CO
Sat Jan 12, 2008
Josiah - Roberta has provided some ideas - depending on your income, there are also some financing programs to help you obtain the down payment - the last 3 buyers I helped all purchased using 100% financing (so no down payment needed) - you typically need very good credit scores, a low debt to income ratio, and evidence of steady and sufficient income in order to obtain 100% financing - 100% financing does carry the risk that if the value of the home has not appreciated when you want (or need) to sell, you may have to bring money to closing in order to sell the the home (this is part of the reason we have so many "short sales" today) - I would always recommend putting some money down if you can but if you can't, then I would advocate making a larger than required mortgage payment so that you build equity in the home at a faster rate in case you do need to sell - let me know if the name of a local lender would be helpful.
0 votes
The Hagley G…, Agent, Pleasanton, CA
Sat Jan 12, 2008
Are you a first time home buyer? 100% financing may be available. You may want to talk to a mortage broker for more information about progrms that are available to you.
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0 votes
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