Could the individual [directly] use the credit cards for the down-payment?
No, not directly.
Indirectly, either via Cash Advance or "Balance Transfer" to a bank account with a promotional rate could work, however you may have to show the money sitting in a bank account and ready to go before the loan will be approved, which means the money you took out on the credit cards will show up when they pull your credit (unless you somehow timed it perfectly, and even if you did that you'd be breaking the law by lying on the disclosure statement about your current debts.)
If he could, are there any negative consequences from doing so (other than probable high monthly payments on the cards)?
Definitely. Let's assume we're talking about the indirect method of cash advance or balance transfer, since that is actually possible. There are 3 things to compare:
- You have saved up enough money for a (hopefully hefty) down payment without taking out any additional loans. This is obviously ideal and should always be the goal.
- You do not have enough money for a down payment and simply don't buy a house right now.
- You do not have enough money for a down payment, so you take out other loans so that you can buy a house right now. The main negative consequence of doing this is simply that you can't afford the house right now, but for some reason you are buying it anyway. I'm not one to judge; there are contrived reasons where this could be justified (your trust fund comes due soon, your big inheritance is still locked up in probate, your guaranteed bonus is coming soon, etc), but in general, if you think you can pay off the CC debt in the near future, then you're most likely better off waiting until you have the money cash in hand.
Final thought: Most of the time the rate you pay on a non-mortgage loan will be higher than that of the mortgage, and furthermore mortgage interest is oftentimes tax deductible, so it would rarely ever make sense to shift would-be mortgage debt into another type of loan, down payment or otherwise.