With the elimination of seller-funded down-payment assistance and nearly all loans requiring at least a small down payment, home buyers--and the builders who sell to them--have to figure out how to come up with thousands of dollars at closing. It’s a big challenge, but builders are making it work.

Across the country, builders, lenders, and real estate agents are educating buyers on their options. For most buyers, the method is an aggressive savings program that starts when the contract is signed. It’s imperative that sales consultants spend time with prospective buyers to help them figure out as many ways as possible to access cash, says Shirley Gary, broker/owner of About Sales, an Atlanta-area real estate firm that specializes in new construction.

“You have to know your business and get in their business,” Gary says. “You have to ask them, ‘How often do you go out to eat? Twice a week? For a family of four, that could be $100. How much did you get back in a tax refund-- $3,000? Then you need to change your dependents on your withholding to get more cash in your check. Will your parents match that?’ It’s back to basics.”

Beazer Homes USA recently launched “Doors to Down Payment,” a Web page that gives prospective buyers a dozen different ways to come up with the cash they need. In addition to such suggestions as the sale of personal property, the use of the $7,500 federal income tax credit, and secured loans from family members, is Buy & Save, a series of installment payments that buyers can put into an account for their down payment.

“A large number of home buyers who lack the money to close might think their only option is to wait,” says Martin Hernandez, vice president of sales for Beazer Homes USA. “Nothing is further from the truth. In the amount of time it takes to build a home, you can save the money.”

One of the methods the Web site suggests is selling personal assets, such as a recreational vehicle, a boat, or a collection of some kind. It’s a strategy that’s been around awhile, as Cheryl Heiks of Wilmington, Delaware, can attest. Her first husband liquidated part of his childhood baseball card collection for the down payment on their first house years ago. “We were newly married, and newly employed without a lot of assets,” Heiks says. “It was a great idea.”

Savings plans and gifts from family members are both popular options, says Natasha Cartagena, vice president and branch manager of Milwaukee, Wisc.-based Shelter Mortgage Company, which provides financing for several builders.

“We do a lot of savings plans with people,” Cartagena says. With some sacrifice and education, she says, most people can save the 3.5 percent down payment needed for an FHA loan in a few months. “Some people save the money in 90 days, some may need six months.”

Gift funds don’t have to come from just one source, and Cartagena says she’s documenting a lot of gifts from several family members--one recent loan included gifts from seven family members. “It’s a lot of work, but it’s worth it,” she says.

Her borrowers also have been tapping state bond programs for down payment assistance--Florida has the State Housing Initiatives Program (SHIP), and Georgia has Georgia Dreams for eligible buyers.

Tova Gold and her husband, Elie Goldschmidt, combined their savings, wedding gift cash, and gift funds from both parents to buy their first home in Teaneck, N.J. “Without their help and without putting extra down,” she says, “we wouldn’t have been able to afford it.”

Gale Communities in Lee’s Summit, Mo., has “tackled this issue on many fronts,” says vice president and general manager Kevin Enyeart. Their most inventive solution involves several houses that it acquired as part of land purchases.

Here's how it works: “Our carrying cost for each property is very low, given that the purchases were wrapped into the land contract,” Enyeart explains. “We’ve placed buyers into some of these properties” while their new homes are being built. So, while these houses are under construction, the future homeowners pay the same amount that they would have paid under a market-rate lease or an amount equal to the mortgage payment on their new home. About $350 to $400 a month goes to cover the carrying costs of the property, and the balance is paid in a different check for additional earnest money. By the time Gale Communities has completed the house, the buyer has enough funds to cover the down payment.

And, despite all the headlines, there are still a few programs with 100 percent financing.

Sue Botelho, loan officer and branch manager of the Northstar Mortgage Group in Destin, Fla., points out that some home buyers can still get into a house without a down payment. The U.S. Department of Agriculture’s Rural Development housing loan program offers qualified borrowers loans with no down payment, no minimum credit score, and no mortgage insurance.

There are income limitations--borrowers can’t earn more than 115 percent of the area median income--and the USDA program is geared to rural areas, but the government's definition of ‘rural’ might be surprising. “Over half of Miami-Dade County qualifies for it,” Botelho says. “It’s the most incredible program in the world, and it’s really underutilized. I’m in the Panhandle in Florida. Our builders here are very familiar with it.”

Mark Patterson, owner of Patco Construction in Sanford, Maine, is an old hand at finding money for first-time home buyers. He’s a big fan of the USDA Rural Development loan programs, as well as state bond programs and Veterans Administration loans. “Most of these programs are designed for first-time home buyers,” he says. “Usually, there’s no money down. We’ve been using most of them for 10 to 20 years.”

Pat Curry is senior editor, sales and marketing, at BUILDER magazine.

Learn more about markets featured in this article: Atlanta, GA.