Down Payment Help in 2025: Grants, Gifts, and 401(k) Do’s/Don’ts
Quick pulse (today): The 30-yr fixed averaged ~6.15% last week. Denver’s median sale price sits around $575K with ~43 days on market—still room to negotiate credits or seller-paid buydowns on longer-sitting listings. Translation: you can trade a small price win for bigger monthly-payment relief.
What’s viable right now
Grants & assistance: CHFA offers a true grant (no repayment) or a deferred-second option, with enhanced help for first-gen buyers or those with permanent disabilities. MetroDPA (the City & County of Denver) also provides assistance across much of the Front Range for qualified buyers (credit ≥640; higher income caps than many expect). Pair either with conventional or FHA financing.
Gifts from family: 100% of down payment and closing costs can be gifted on many loan types—just budget for a clean paper trail (gift letter, documentation of transfer) so underwriting is smooth. (Your lender will coach the exact format.)
401(k) funds (proceed carefully): A plan loan is generally capped at the lesser of 50% of your vested balance or $50,000 (some plans allow a $10k minimum). A hardship withdrawal can cover a primary-residence need but is taxable and may face a 10% early-withdrawal penalty if you’re under 59½—and it isn’t repaid to your account. Loans usually beat withdrawals on long-term impact.
Timelines that work
With assistance: plan for ~30–45 days so your lender can layer in the grant/second-lien approvals.
Without assistance: many clean files still need ~25–30 days. (Exact timing varies by lender and program; we’ll set the contract to fit the financing.)
Andy’s tip: On homes sitting 30–70 days, ask first for seller credits to cover closing costs and a 2-1 buydown; then use inspection leverage for roof/sewer/HVAC. Lock the payment you can live with—treat any future refi as a bonus, not a plan.
— Andy | Your Denver neighbor + data-driven Realtor®
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