Lenders require borrowers to come to closing with a down payment in order to account for a small portion of equity on the loan as an upfront guarantee to limit risk exposure. The required amount of down payment is typically dictated by the loan program the you agree to and qualify for. You can always put more money down that a lender may require in order to reduce your monthly payment amount. The down payment does not cover any other fees associated with your loan, it is simply your “skin in the game”. If a borrower does not have the required down payment necessary to complete the transaction, they may use a “gift” from an acceptable donor, usually a relative. The “gift” from the donor must be accompanied by 1) a signed letter stating that the gifted funds to not have to be paid back, 2) a bank statement from the donor showing the money in their account, and 3) proof of the withdrawal of these funds. Additionally, the lender will require proof that the funds were deposited into your account through a bank statement or transaction history. You can never borrower funds for a down payment or even closing costs unless you are obtaining a bona-fide loan from a 401K retirement account. This is the only allowable source of borrowing when purchasing a home.