Many state and local programs have been created to help first-time home buyers obtain the cash and financing they need.

They almost always offer:

Cash for down payments and closing costs. In many cases that money never has to be repaid -- if you live in the home long enough.

Loans with low interest rates and affordable monthly payments. You'd be hard-pressed to find a better deal, even in our extensive rankings of interest rates and payments from banks and mortgage companies across the country.

Some provide cash and low-cost loans.

Each public program has its own eligibility rules. There's usually a limit on how much money you can make and on how much you can spend for a house. Good credit is helpful. Steady work a must.

Applying for such help isn't any more difficult or more time consuming than applying for a conventional mortgage and the potential benefits are so good that every first-time buyer should find out what their state and/or local housing departments have to offer.

You know you'll get a loan you can afford, not a potentially dangerous mortgage with artificially low teaser rates and payments that will dramatically increase in just a few years -- or even a few months.

This kind of help is especially important since a rash of defaults over the past year has made loans, especially those that require no down payment, more difficult for many first-time buyers to obtain.

It would be impossible to list every program, but they're easy to find. Just do an Internet search for "first-time buyer programs" in your county or state.

Here's the kind of assistance you can expect from state programs:

MICHIGAN: 30-year fixed-rate loans for new and existing homes, condos and certain mobile homes at 5.875%, or 6. 25% if you get down payment assistance. A step-rate loan has a 5.375% rate for the first three years and 6.375% for the remaining 27 years of the mortgage. The programs are administered through the Michigan State Housing Development Authority.

NEW HAMPSHIRE: 30- and 40-year mortgages with below-market rates are available for single-family homes. Borrowers can get cash assistance up to 4% of the loan amount, but they must contribute an additional 1% out of their own funds. This program is available through the New Hampshire Housing Finance Authority.

OREGON: 30-year fixed-rate loans for as little as 5.99%, or 6.49% if you also obtain money for closing costs -- up to 3% of the loan amount. They're offered through Oregon Housing and Community Services.

TEXAS: 30-year fixed-rate loans are typically 1% lower than current markets rates. If you need assistance with the down payment or closing costs, you can get up to 5% of the loan amount. Another program offers up to 8% of the purchase price for down payment and closing costs as a repayable second mortgage. They're all offered through the Texas Department of Housing and Urban Affairs.

PENNSYLVANIA: 30-year fixed-rate loans for as little as 6.5%, or up to $35,000 to cover down payments and closing costs. That cash is an interest-free second mortgage that's forgiven over the first five to 10 years you live in the home. These and other programs are offered through the Pennsylvania Housing Finance Agency.

Here's the kind of assistance you can expect from local programs:

LAKE COUNTY, ILL.: Up to $50,000 in no-interest or low-interest loans to serve as a down payment. You don't have to repay any of that money until you sell the home. This program is offered through the Affordable Housing Corp. of Lake County.

SAN BERNARDINO COUNTY, CALIF.: Up to $44,000 in no-interest loans for a down payment and closing costs. The loans don't have to be repaid until the home is sold. This program and others are offered by the San Bernardino County Housing Assistance Program.

BROWARD COUNTY, FLA.: 30-year fixed-rate loans at 5.25% with no down payment assistance, or 80/20 financing at 5.25% for the first mortgage and a low 6.25% rate for the second mortgage. These programs are available from the Broward County Housing and Community Development Division and the Housing Finance Authority of Broward County.

By Carolyn Siegel

Interest.com Associate Editor

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