family laying on the floor of their new home surrounded by moving boxes

Are you interested in buying a home but don’t think you can raise the money for the down payment and other home-buying costs? Review the options below and you may be able to find unknown, acceptable sources to fund your new home purchase.*

Gift Funds
There may be family members willing to gift you the funds to purchase your home. These funds also include grants and charitable donations. Grants are available through government programs to help first-time home buyers, like the First Front Door program. Charitable organizations, like Habitat for Humanity and churches, may have funds available to help you as well.

Secured Loans
You can secure a loan against your investment, retirement or 401k accounts. You could also take out a loan against the equity in your other real estate properties. These loans are not counted as debt when your debt ratios are calculated for your home loan.  

Loans from Family Members
Family members may choose to take out a secured or unsecured loan on their real estate property to secure the funds you need. These loans are calculated in your debt payment because this is a debt you must pay back to a third party.

Sweat Equity
If you have made upgrades to the home prior to purchase, the seller may count material and labor performed by the buyer as down payment funds.

Trade Equity
You can trade your real property to the seller as part of the cash investment to fund your down payment. An example of this would be trading a motorcycle you own to the seller for the down payment on the house.

Sale of Personal Property
You may sell items, such as your car, motorcycle or boat for funds. You will need a third party estimate of value and proof of sale to use these funds as your down payment. Third party documents are required to verify you owned the property you sold, the value of the item and the actual sales receipt.

Commission from Sale
If you have a family member who is a licensed real estate agent, representing you in the purchase of a house, they can opt to gift the commission they would receive to you to be used as a down payment.

Bridal Registry Accounts
To use funds from a registry, the account must be opened prior to your wedding and designated for a home purchase. This account must be separate from any other account you may have. It allows your family and friends to deposit cash as a gift you and your spouse can use to fund a down payment. This account will alleviate the need for each person to sign a letter verifying their gift is to be used to purchase your home.

Tax Refund
Don’t forget, your tax refund can be used to fund your down payment and home buying costs.
Contact First Commonwealth’s mortgage department today to discuss your options and receive the help you need to make your dream of owning a home a reality.


*Please note: additional documents and detail requirements may apply to each funding source but all are legitimate and workable solutions to getting your down payment funds.