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Purchasing a home is a big investment, but often a daunting part of the process is the down payment. For many homebuyers, the ability to put down thousands of dollars at the closing table may prevent them from considering homeownership. But did you know gifts and down payment assistance are an option?

For example, a family member can gift you cash toward a down payment, as long as you can provide a letter from the giver saying the gift isn’t a loan. A copy of the giver’s bank account statement showing the funds and a canceled check also could be required. Also an option are gift assistance programs, where home sellers can help buyers pay closing costs by giving a portion of their proceeds back to the buyer at closing.

In addition to gifts, first time homebuyers can often utilize their 401k to assist or cover a down payment.

Want to learn about what minimum down payments are required? See Video:

» Down Payments and Loan Types