A lot of things have changed in regards to lending. Although gift funds are allowed to be used for a down payment, they are only allowed AFTER YOU meet the minimum down payment requirements.
For instance, if you qualify to put 5% down on a Conventional loan (there is a 5% down Conventional loan program) you can add an additional 5% down from a gift. You will not be approved for a Conventional loan if your entire down payment is from a gift.
There is a new loan program from the State of AZ that lets you buy a home using only 1% of your own funds for a down payment.
This loan program requires 3% down, BUT you can be gifted 2% of that down payment. It's called the Your Way Home AZ loan programs http://(www.YourWayHomeAZ.com
). This program will "give" you a 22% "silent" second mortgage, at a 0% interest rate & no payments due, AND this second mortgage loan is forgiven after you live in the home for a certain length of time, depending on the loan amount.
I hope that helps...
All the best,
Roswell Moore, CMPS
Certified Mortgage Planner
(480) 422-5095 Direct