What about low down payment loans?

Such loans are offered by a host of private lenders and government agencies. In fact, there are government programs at both the federal and state level to help cash-strapped buyers. Under many state guidelines, borrowers must usually be first-time homebuyers or have a limited family income to qualify for low down payment loans.

The Department of Housing and Urban Development (HUD) offers several programs through the Federal Housing Administration (FHA) that require down payments of 3 to 5 percent.

President Bush recently proposed a “zero down mortgage” for his 2005 budget that he says would qualify about 150,000 FHA-insured borrowers in the first year alone.

Fannie Mae, the nation’s largest supplier of home mortgage funds, has a popular program for low- and moderate-income homebuyers called Community Home Buyers. Under the program, borrowers may buy with just 3 percent down, with a 2 percent gift from family members, a government program, or nonprofit agency. The program is available through participating mortgage lenders.