Avoid PMI and then go to a local credit union and get a heloc after closing to gift the money back.Have this as a tool in your tool belt but pursue use of the 3.5% FHA, knowing that you will be at a competitive disadvantage if you are competing with non FHA buyers, then you can call in the favor from your gift person.Just know that if someone gifts you down payment money, your bank will require them to sign a letter stating that it is in fact a gift that doesn’t need to be paid back.

You need to build your credit.

Fast forward 20 years: I now have money in the bank, excellent credit, live modestly on my own, and run a business that’s doing well.Unfortunately, I wasn’t able to save much for retirement during most of my life.

Also Mike, why is cash out higher with refi, do you mean just with the credit union scenario? 

Bank Credit Line How did you add value to the deal?

Verifying last 2 years of rental history very important!

Ask for a line of credit.  

Hey @Brett RiemensniderThere are a TON of banks/credit unions that will offer as low as Prime on a heloc on your primary residence.

What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.?

True re the prior poster, re this helping the seller save their credit, if you buy sub-to you will dramatically raise their FICO since the mortgage will show on-time payments.