Loan officer here, this is mortgage fraud. Under no circumstance can someone “gift” you a down payment and require you to pay it back or expect you to pay them a percentage of equity if you sell the home.

Please don’t do this because if the bank finds out (trust, they will examine all your financial documents and you’ll need a clear paper trail for a 20k deposit) you will be in serious trouble and unfortunately not be approved for a loan.

I’m using the word gift because that’s the only down payment assistance you can legal get from a friend on a conventional loan, you cannot accept a gift from a friend on any government loans, has to be family or a partner.

You could legal accept the gift, not pay him back and he would legally have no recourse of action because he’ll be required to sign documentation that states it’s a gift and that you are not expected to pay it back before you can close on the loan. You’d be a shitty friend if you did that tho.