Most areas of the country have been experiencing some very attractive conditions for the first time buyer, and current tax laws make this a very attractive time for parents to help their children become homeowners. Prices and interest rates may never be lower than they are now, so strongly consider this potential investment in your children's future.
As parents, you can provide a significant down payment, free of taxation. Individuals may gift up to $13,000 per year, so two parents making gifts to their child and their spouse can give a total of $52,000 in one year without paying a gift tax!
Above and beyond the outright gift, you may loan your family money, as long as you charge a minimum interest rate, which is currently very low. Then you can make your gifts each year, and your child's family can use the gifts to pay the loan!
If neither of these options is attractive, you could purchase the home yourself and then set up a Qualified Personal Residence Trust (QPRT), with the home passing to the children at the end of an established term, tax free. You will need to consult with your financial adviser and employ an attorney to handle this kind of transaction.
Begin by meeting with a real estate agent and explaining your situation. Contrary to what you may have been hearing, there is practically no better investment today than real estate.