Figuring out how to buy a house with no money down is really a stacking problem. VA and USDA loans already finance 100 percent of the purchase for eligible buyers. For everyone else, the major loan programs accept a down payment made entirely of gift funds, and seller concessions and lender credits can cover most or all of the closing costs and prepaids. Stack the right pieces and buyers regularly close with a fraction of the cash people assume is required, sometimes with almost none. We spent this episode on the levers that make it work, and on the caps and catches attached to each one, because every piece of this is negotiated and none of it is guaranteed.
Your cash to close is three buckets. The down payment is set by your loan program. The closing costs are one-time charges for closing the purchase: lender fees, the appraisal and credit report, title insurance and settlement services, recording fees, and in some states transfer taxes. The prepaids are real ongoing expenses collected early: your first year of homeowners insurance, interest for the days remaining in your closing month, and a few months of taxes and insurance to establish an impound account.
CoreLogic's ClosingCorp data puts the national average for closing costs at 1.81 percent of the purchase price, about $3,860 before taxes. (The cost averages and program caps in this article reflect the market as of this episode, 6/29/2026, and shift over time; confirm current figures with a lender.) As a planning range, most buyers land between 2 and 4 percent of the price for costs and prepaids combined, with high-tax areas like Maryland, New York, and the District of Columbia at the expensive end. The full anatomy is in our guide to how much closing costs really run.
Ground it with the example we ran on the show: a $600,000 purchase at 5 percent down means $30,000 down, roughly $12,000 in closing costs, and about $6,000 in prepaids, call it $48,000 all in. The rest of this article is about how much of that $48,000 someone else can pay.
Down payment minimums vary by program, per current guidelines and always worth confirming:
Buyers regularly watch one video, decide FHA is the answer, and stop comparing. Put the comparison on paper every time, because a conventional 3 percent option can beat FHA on both cash to close and payment for one file and lose badly on the next. Our full FHA versus conventional breakdown covers how those trade-offs shake out.
A seller concession, called an interested party contribution in the guidelines, is a credit from the seller, negotiated into your offer, that pays your closing costs and prepaids. It can cover discount points, lender fees, title insurance, transfer taxes, prepaid insurance, interest, property taxes, even HOA dues. The one thing it can never touch is your down payment.
Each program caps the credit, per agency guidelines you should confirm before writing an offer:
In 30+ years of lending, we have never seen a file actually use the 8 or 9 percent tier, but the room exists. The caps are there because an oversized credit starts to look like an inducement: if a seller hands back $50,000 on a $600,000 sale, maybe the house was only worth $550,000.
Whether you can get a concession at all comes down to supply and demand in your market. In a multiple-offer situation, an offer asking for credits competes badly against clean ones; one listener's Florida purchase drew six offers and zero concessions even in a slow state. In a cooler market, credits become routine. One structure from Jeb's listing-side playbook when a seller will not move off their number: offer $610,000 instead of $600,000 with a $10,000 credit back. The seller nets the same, you keep $10,000 in the bank, and the risk shifts to the appraisal, which has to support the higher price. We went deeper on that negotiation in how seller credits work.
On any given day your lender has a par rate, the rate that carries no discount points and no credit. Pay points and the rate drops. Accept a higher rate and the lender hands back cash toward your closing costs, because a loan collecting more interest every month is worth more. The rule of thumb we have used for years: moving up a quarter percent in rate has historically bought about 1 percent of the loan amount in credit, which on the $570,000 example loan means $5,700 toward your costs. One warning, though: secondary-market pricing does not always cooperate, and some days a quarter percent buys less than a full point of credit, so the trade has to be penciled on live pricing rather than assumed. Josh's team shops nearly 100 investors, which is precisely where that breadth pays off, finding whose pricing makes the credit math work on the day you lock. The full mechanics are in lender credits explained.
Every core program, meaning Fannie Mae and Freddie Mac conventional, FHA, VA, and USDA, allows an owner-occupied purchase where 100 percent of the down payment, closing costs, and prepaids come from a gift, per current guidelines. The donor generally needs a long-standing relationship with you and a logical reason to be giving you money; family is the classic case, though the rules are broader than family-only. The program-by-program rules are in our guide to using gift money to buy a house. Gifts are generally not allowed on investment property purchases.
Two catches. A gift can cover every dollar of the cash, and you still have to qualify on income, credit, and debts like any other borrower. And a file where the buyer has saved literally nothing of their own can struggle in underwriting, because both automated systems and human underwriters hesitate over a borrower with no track record of saving. We will be blunt about the upside: the large majority of otherwise-ready buyers Josh's team works with could close with essentially no money out of pocket when a donor covers the funds. Structure still matters. If your mom can give $22,000 and you hold $10,000, the split between down payment and costs is a planning decision, one more reason to work with a lender who models the options instead of quoting one program.
Concessions can only shrink to your actual costs, so you never pocket a difference. Negotiate more credit than you have costs and the extra can come off the purchase price, or it can buy discount points that permanently lower your rate, or fund a temporary buydown. The popular 2-1 buydown sets your payment 2 percent below the note rate in year one and 1 percent below in year two, typically costs about 2 percent of the loan, and returns you to the full rate in year three. That same 2 percent could instead buy roughly a half percent off the rate for the life of the loan. Which is smarter depends on your time horizon, and the warning stands: no lender can promise you a refinance before a buydown expires, because nobody can promise where rates go.
A seller credit is still your money. The seller nets the same either way, so spend it like your own.
That framing matters because loan officers love to treat negotiated credits as free money to burn. A seller who accepts $670,000 with $10,000 back would have accepted $660,000, so you are really choosing between owing less on the house and holding more cash, and that choice deserves a real comparison on paper.
Put it together on the $600,000 example and the picture changes completely: a low-down program, a gifted down payment, and a seller concession sized to your actual costs can take $48,000 of assumed cash down to nearly nothing. Every lever carries a trade-off. Less cash in means a bigger loan and a higher monthly payment, a gift means a conversation with the donor, and a credit earned through a higher rate means more interest for as long as you hold the loan. Everything here is a trade-off, and the job is structuring an offer the seller will accept with a payment you are comfortable holding. That structure gets built before you write the offer, with your lender and your agent working the same numbers. To see your own version mapped out, the free Roadmap conversation takes about 20 minutes, and lays out your loan options, payment, and cash to close side by side.
Stop guessing what you can really afford
Tell Josh and his team your situation, and you'll get the exact price range you qualify for, the loan that gets you the most home for your money, and a step-by-step plan to close. They handle your loan directly, never a referral, and go far beyond a basic pre-approval, so you stop second-guessing, tour with confidence, and write offers sellers take seriously.
Build my Roadmap →Yes, in specific situations. VA and USDA loans finance 100 percent of the purchase for eligible buyers, and on the other major programs a gift can cover the entire down payment while seller or lender credits absorb closing costs. You still must qualify on income, credit, and debts, and getting sellers to contribute depends on your market, so treat it as a structure to negotiate rather than a promise.
No. Seller concessions can pay any closing cost or prepaid item on your settlement statement, from lender fees and title insurance to prepaid taxes and insurance, but program rules never allow them to fund the down payment itself. If the down payment is your obstacle, gift funds are the lever that works there, since major programs allow a fully gifted down payment on an owner-occupied home.
It depends on the loan program and your down payment. Per agency guidelines, conventional loans allow 3 percent with less than 10 percent down, rising to 6 and then 9 percent with larger down payments, while FHA and USDA allow 6 percent and VA uses a 4 percent cap that excludes several cost types. Caps change, so confirm current limits with your lender before writing the offer.
Generally someone with a long-standing relationship to you and a logical reason to be giving you funds. Family is the most common case, but the guidelines are broader than family-only. On owner-occupied purchases, the major programs allow gifts to cover the down payment, closing costs, and prepaids entirely, though gifts are generally not permitted when you are buying an investment property.
A lender credit is cash toward your closing costs that you earn by accepting a higher interest rate, since a loan paying more interest is worth more to the lender. As a rule of thumb, a quarter percent of rate has historically bought about 1 percent of the loan amount, though pricing varies day to day. It is worth it when preserving cash matters more to you than the somewhat higher payment.