Downpayment using gift and seller contribution?

[benjita]

Looking to buy a home worth $250k. Parents offering to gift $40k or (16% of purchase price). Under a conventional loan can we use a seller contribution to cover the other 4% needed to total 20% down?

[StartingOver10]

No, the seller can not contribute toward your down payment. The seller can contribute toward your closing costs, but not your down payment.

Also for conventional loans you have to have some skin in the game, it can't be all of your parents money. FHA allows a gift for 100% of the down payment, but not conventional. One of the LO's will jump in here, but I think you need a min of 5% of your own money on a conventional loan.

[DallasLoanGuy]

you need the first 5% of the down payment of your own money for conventional(unless we can document that the family member lives with you).

fha allows 100% gift

the 1st 5% can be from stocks, 401k, ect