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Sources of Down Payments in Buying a House

A common frustration for many would-be first-time home buyers is getting together the money for a down payment. Here are some down payment strategies:

  • FHA and VA loans allow gift funds from family and even the seller.
  • If you have an asset like a boat or car the seller would like to have, you can sometimes use that for a down payment credit.
  • Your state housing authority may have zero-down programs.
  • Use your 401(k) or IRA for a down payment. Special provisions allow you withdraw up to 50 percent from your IRA to buy a principal residence for you, your child, or your grandchild.
  • You may be able to borrow from your insurance policies or employer programs.

Investors may be offering some zero-down programs; check with your lender.

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