Will your parents be able to loan you some as a "gift"?  

I am in tax working on a specialization in estate, trust, and gift tax and she is in audit and is just waiting for the official CPA papers to come in the mail-woot!.

cite=82.45If the property is owned free and clear and there is no consideration given then you can document the affidavit as a gift, making it a taxable event for you personally and not the Seller. 

A note/gift would not count or be able to be used to pass.

A discount could be perceived by the IRS as a taxable gift. 

You will qualify as a first time home buyer and you have lots of options available to you especially if you have family member s that can assist you with gifted funds for your down payment and or closing cost.  

Not sure if your parents can co-sign or gift you a down payment, 3.5% on an FHA for owner occupant.  

If you have access to a family member with the money and willing to gift you money, they can gift you up to 14K without tax consequences. 

I'm vaguely aware that there are circumstances where the IRS will ding someone for the interest rate being so low that it amounts to a gift.

If I buy has her daughter, I will have to pay fair market value to avoid gift taxes (Right?).