A Guide for Homebuyers: Hidden Financing Options That Could Get You to the Closing Table Sooner  

As a real estate agent, one of the most common reasons buyers hesitate to move forward isn’t credit, income, or even market conditions; it’s the upfront cost. Between the down payment, closing costs, and reserves, the cash required at closing can feel like an insurmountable hurdle. But here’s the good news: there are more ways to cover those costs than most buyers realize: down payment assistance programs, first-time homebuyer grants, zero down payment loans, and other financing tools that can dramatically reduce (or even eliminate) the cash required to close. 

Sharing this knowledge with your clients early can be the difference between a deal that stalls and one that closes.

Below is a breakdown of financing tools and programs that many buyers overlook, and that agents can use to keep deals moving forward.

1. Gift Funds: Let Loved Ones Contribute to the Down Payment

Many buyers don’t realize that a family member, close friend, or even an employer can contribute money toward the down payment. These are called gift funds, and they’re allowed on most conventional, FHA, VA, and USDA loans, as long as they’re properly documented with a signed gift letter confirming no repayment is expected.

Key points to share with buyers:

• On FHA loans, 100% of the down payment can come from gift funds.
• Conventional loans may require the borrower to contribute a portion of their own funds, depending on the LTV.
• The gift giver may need to provide bank statements showing the funds leaving their account.

Agent Tip: Ask buyers early in the process whether family members have offered to help. Getting the gift letter and paper trail in order early prevents last-minute delays.

2. Down Payment Assistance (DPA) Programs and Grants

Down payment assistance programs are one of the most underutilized resources in real estate, and one of the most powerful tools in an agent’s arsenal. Offered by state housing finance agencies, local governments, nonprofits, and even banks, these programs provide funds to help cover the down payment and sometimes closing costs — and in some cases, that money never has to be repaid at all.

DPA programs generally come in four forms:

• Forgivable loans: Forgiven after the buyer lives in the home for a set number of years (often 5-10). If they stay, they never pay it back.
• Deferred payment loans: No monthly payments required. Repayment is only due when the home is sold, refinanced, or the primary mortgage is paid off.
• Grants: Free money with no repayment obligation, available through federal programs, state agencies, local housing authorities, and banks. Many are targeted at areas designated for revitalization or economic development.
• Matched savings programs: Some match every dollar the buyer saves towards a down payment, up to a set limit.

Eligibility varies by program but commonly includes income limits, purchase price caps, and credit score minimums. Many programs are designed for first-time buyers, though some are open to repeat buyers in targeted areas. There are thousands of programs nationwide, and many buyers are surprised to learn they qualify. It’s also worth noting that funding levels change frequently — some programs run out mid-year — so encouraging buyers to apply early can make a real difference.

Agent Tip: Partner with a mortgage professional who actively tracks DPA programs and grants in your market. Being able to say “I know a lender who can layer a DPA program onto your loan” is a competitive differentiator, and the best lenders will know which grant programs still have funding available at any given time.

3. Seller Concessions: Negotiate Closing Costs Into the Deal

This one is entirely within an agent’s control. Seller concessions allow the seller to contribute toward the buyer’s closing costs as part of the purchase agreement, reducing the cash a buyer needs to bring to the table without lowering the purchase price.

For example, a buyer might offer $355,000 on a $350,000 home and ask the seller to contribute $5,000 toward closing costs. Instead of needing that $5,000 in cash, it’s rolled into the financed amount. Each loan type, FHA, VA, USDA, and conventional, has o structure iits own limits on seller concessions, so coordinate with the lender tt correctly.

Agent Tip: In a softer market, seller concessions are often negotiable and can be the key to keeping a deal alive when a buyer is short on closing funds. Make it part of your standard offer strategy conversation.

5. USDA and VA Loans: Zero Down Payment Options

Two government-backed loan programs allow qualified buyers to purchase a home with zero down payment:

• VA Loans: Available to eligible veterans, active-duty service members, and surviving spouses. VA loans offer 0% down, no PMI, and competitive rates. Eligibility is broader than many buyers assume.
• USDA Loans: For buyers in eligible rural and suburban areas. Also 0% down with below-market interest rates. The eligible map covers far more areas than the name “rural” suggests.

Agent Tip: Always ask buyers about military service and check USDA eligibility for the neighborhoods you’re showing. A buyer who thinks they need 3–5% down may actually qualify for 0% down, which can completely change what they can afford.

The Bottom Line: Informed Buyers Close More Deals

When buyers understand all the tools available to them, the path to homeownership becomes a lot clearer and a lot shorter. As their agent, you have an opportunity to be the person who opens that door. Sharing resources like this one, and connecting buyers with a knowledgeable mortgage professional early in the process, can turn “I’m not sure I’m ready” into “when can we make an offer?”

The buyers who feel most confident are the ones who know their options. Make sure yours do.

At Gershman Mortgage, communities, families, and homes are at the heart of what we do. Built on the core values of honesty, integrity, entrepreneurial spirit, and customer-first service, we’re committed to providing an exceptional homebuying experience. Our goal is simple: to exceed expectations and build lifelong relationships.

NMLS #138063 16253 Swingley Ridge Road Suite 200 Chesterfield, MO 63017 (800) 457-2357 Equal Housing Lender. Serving borrowers in: Alabama, Arkansas, Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Wisconsin

Written by Kaylee Larson for Gershman Mortgage