Where Can You Get a Down Payment for a New Home?

Saving for a down payment is often one of the biggest hurdles for homebuyers—but the good news is, you may have more options than you think. Whether you're a first-time buyer or just need a little extra help, here are several potential sources for your down payment:

1. Personal Savings

Let’s start with the obvious—your own savings. If you’ve been putting money aside in a checking, savings, or high-yield account, that cash can be used for your down payment. Setting up an automatic savings plan is a great way to consistently grow this fund over time.

2. Gift Funds from Family or Friends

Many loan programs allow you to use gift money from a family member (and in some cases, even a close friend) toward your down payment. There are a few guidelines to follow, like providing a signed gift letter and showing the transfer of funds—but it’s a perfectly acceptable and common source of down payment help.

3. Down Payment Assistance Programs (DPA)

There are state, local, and even employer-sponsored programs that offer grants, forgivable loans, or deferred-payment second mortgages to help with your down payment and/or closing costs. These programs are often geared toward first-time buyers, teachers, healthcare workers, and other community heroes.

Tip: Ask your lender to help you find DPA programs you may qualify for—they’re often underutilized!

4. Retirement Accounts

While dipping into retirement should be a last resort, some accounts like a 401(k) or IRA allow penalty-free withdrawals for first-time home purchases. There may still be tax implications, and you’ll want to talk to a financial advisor before going this route, but it’s an option worth exploring if you’re in a pinch.

5. Equity from a Previous Home

If you’re selling a home and buying a new one, the equity you’ve built up can be rolled into your down payment on the next property. This is one of the most common ways repeat buyers fund their next purchase.

6. Side Hustles or Tax Refunds

Increasing your income through freelance work, part-time gigs, or seasonal jobs can help you reach your savings goals faster. Also, many buyers choose to put their tax refunds or bonuses straight toward their down payment fund.

7. Sale of Personal Property

Selling a car, motorcycle, boat, or other high-value items can provide an instant cash injection. Just make sure to document the sale and deposit so your lender can source the funds properly.

Final Thoughts

You don’t have to come up with your entire down payment from just one source—and you don’t have to do it alone. As a mortgage professional, I help buyers navigate all their options and create a strategy that fits their financial situation.

If you’re wondering how much down payment you’ll need, or want to know which programs you might qualify for, let’s chat! You may be closer to homeownership than you think.