Mortgage lenders have pretty much jettisoned zero-down mortgages, just as they demand more cash than ever for a down payment on a new home loan. So, how do you come up with a decent down payment?

It’s not as difficult as you might think. Whether you get help from your Uncle Lou or get a government loan from Uncle Sam, it’s all about getting creative with your down payment funding.

How about some background first? The 2009 J.D. Power & Associates Home Buyer/Seller Study shows that more first-time home buyers are entering the housing market (up to 56% from 44% in 2008), meaning that the importance of initial down payments is on the rise, too.

Fortunately, the direction of down payments is trending higher. According to the National Association of Realtors, median down payments by first-time home buyers rose to 4% in 2008, doubling the rise to 2% that the NAR cites in 2007.

So how to get some help with your down payment? Let’s have a look.

The gift that keeps on giving. – If you can swing it, getting a tax-free cash gift from a family member – usually a parent – is a good deal for both sides. Internal Revenue Service “gift” rules say that each parent can give a child (of any age) up to $12,000, usually without having to pay any taxes on the money. The family member must file a tax return citing the gift, and may eventually have to pay taxes on it if he or she triggers the $1 million lifetime exclusion rule the IRS has in place.

Get a loan from your state. – You might have heard about the $8,000 tax credit that the government is offering for first-time home buyers. It’s a move designed to jump-start the housing market. So now, creative new home buyers can leverage the tax break in new ways. Take, for example, the loans some states are using to get people into new homes. The loans are short-term, and are made directly to new home buyers to use as down payments. The states hope to get the money back either by direct repayment or off the federal tax credit, which gives homeowners more financial cushion in repaying state down payment loans. So far, New Jersey, Ohio and Missouri offer such loans. Check with your state’s housing finance office to see if you can get in on the action.

Lean on Uncle Sam.
– Federal loans for new home down payments can also be had these days. For instance, the Federal Housing Administration (FHA) has a mortgage insurance deal that enables new home purchasers to buy a home with only a 3% down payment. That’s a big discount, considering that most lenders seek at least 20% down before green-lighting a loan. If you’ve served in the military, the Veterans Affairs office is dangling home loan guarantees that actually require no down payments.

If you just don’t have the dough, but want to get into a new home anyway, it’s not exactly mission impossible. Follow the steps above and see if you manage an end run around high down payment minimums – and land in the house of your dreams.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at