A zero-down loan or a down payment assistance program covers the deposit, a seller credit and a lender credit cover most of the closing costs, and a documented gift covers whatever is left, but the earnest money and the inspection come out of your own pocket weeks before closing and no credit refunds them.
Most answers to this question are about the down payment, which is the part that has programs behind it. The harder part is everything else: closing costs, the taxes and insurance the lender collects up front, and the savings a lender wants to see after you have paid for all of it. Those are the piles that quietly sink a purchase that looked possible.
This page is about all of the cash. The down payment routes have their own page, and it is linked below. Nothing here is lending advice, and no program is approved until a lender has your file.
There are four piles of cash, not one
On a $400,000 purchase the four look roughly like this. The down payment is anything from nothing on a VA or USDA loan to $80,000 at twenty percent. Closing costs, meaning the lender's fees, the title and escrow charges and the recording, run commonly two to five percent of the price, so $8,000 to $20,000. Prepaids are separate from those: the first year of homeowners insurance paid in advance, plus several months of property tax and insurance deposited into the escrow account at closing, commonly $3,000 to $6,000 in the Las Vegas valley where the tax rate is low. And reserves are what the lender wants to see left over afterward, commonly zero to two months of the full payment on an owner-occupied loan and more on a condo or an investment property.
People are surprised because the four are quoted separately by four different parties. The loan estimate a lender issues in the first three days shows all of them in one place, and it is the document to ask for before deciding whether this is possible.
What somebody else can pay
Each of these has a limit, and stacking them is normal rather than clever. What a lender will not accept is money that arrives without a paper trail.
- A seller concession: the seller agrees in the contract to put a sum toward your closing costs. It does not lower the price, it lowers the cash you bring. Loan programs cap it, commonly at two to six percent of the price depending on the program and the down payment.
- A lender credit: you take a slightly higher interest rate and the lender pays part of your closing costs in exchange. A quarter point of rate commonly buys somewhere near half a percent of the loan in credit, and it costs you every month for as long as you keep the loan.
- Gift funds from family, which conventional and FHA loans both allow on a primary residence. The lender wants a signed gift letter saying it is not a loan, plus proof the money left the giver's account and arrived in yours.
- Down payment assistance from a state or local housing agency, usually a grant or a silent second loan, usually with an income cap and a homebuyer education class attached.
- Employer, union and profession-specific programs, which exist more often than people check for.
The money that has to be yours
Earnest money goes to escrow within a day or two of the offer being accepted, commonly one percent of the price, and no credit reaches it because closing has not happened yet. It is not lost: it is applied to your costs at closing, or returned if you cancel inside a contingency. It just has to exist first.
The inspection is paid the day it happens, commonly $300 to $600 for a general inspection plus $100 to $300 for each specialist, and it is not refundable if you walk away. The appraisal is commonly $500 to $800 and is often collected up front too. Between them, call it $1,000 of genuinely spent cash before anybody knows whether the deal closes. Setting that aside is the real first step, ahead of the down payment.
What this route costs after you move in
Buying with none of your own money means the largest loan the house will carry, which is the largest payment. Under twenty percent down on a conventional loan there is mortgage insurance until the loan-to-value reaches the cancellation point; on most current FHA loans the annual premium stays for the life of the loan. A lender credit raised the rate. An assistance second loan may have to be repaid on sale or refinance.
The honest test is the month after closing. If the payment works with nothing in savings, the plan is thin but real. If it only works because nothing breaks, wait and save the reserves instead.
Questions people ask
Can you really buy a house with zero dollars?
Almost never to the last dollar. Earnest money and the inspection are spent before closing and no credit covers them. Everything after that point can be covered by a zero-down loan, a seller credit, a lender credit and a gift.
How much can a seller pay toward my closing costs?
The contract sets the amount and the loan program sets the ceiling, commonly two to six percent of the price depending on the program and how much you put down. Anything above the ceiling is wasted, so the number is negotiated against the cap.
Do lenders check where the down payment came from?
Yes, in detail. Underwriting reads two months of bank statements and asks about any deposit that is not payroll. A gift needs a letter and a trail; cash handed over in person usually cannot be used at all.