Ideally, you'll put 20% down toward your new home because at that level you can avoid paying private mortgage insurance. If your calculations indicate that you can't put at least 10% down, here are some options to consider:

• Loans with no down payment, or those that combine first and second mortgages, such as the 80/20, are gone for the most part. Mortgages backed by Fannie and Freddie require a minimum down payment of 3% to 5%.

• Loans backed by the Federal Housing Administration have regained favor as an option, not just for credit-challenged borrowers (typically those with credit scores under 620) but for prime borrowers looking for low down payments. The FHA requires just a 3% down payment. However, to qualify for an FHA-backed loan, your mortgage debt cannot exceed 31% of your income, and total debt can't top 43%.

• Investigate state and local programs for low- and moderate-income families and for first-time buyers. You may be able to get a lower-rate mortgage with a small down-payment requirement. Check what's available through any lender or real estate agent, or through your state or local housing agency. Visit the National Council of State Housing Agencies Web site for a listing of state housing finance agencies in your region.

• Low-income families looking to buy in rural areas may qualify for the USDA's Rural Housing Service (RHS) no-money-down program. For more information visit the RHS Web site.

• Consider buying a less expensive condo or house that needs fixing up.

• Rent using a lease-option contract, which gives you the right to live in the house for a period of time and the right to buy the property for a specified price during an agreed-on period of time.

• Look for property whose seller is willing to act as the lender. You don't have to meet institutional credit standards and may be able to work out a better deal.

• Consider an equity-sharing purchase with a family member who is willing to make the down payment, or arrange a gift from family or friends.

• Consider a penalty-free IRA withdrawal for a first home. Once in your lifetime you can withdraw up to $10,000 from your IRA without paying a penalty, regardless of your age, to help pay for a first home for yourself or a family member (such as a spouse, child, grandchild, parent or grandparent). If you're married, you and your husband or wife can each take $10,000 from your IRAs penalty free for a first-time home purchase.

  If you have a traditional IRA, you won't get hit with the usual 10% early-withdrawal penalty, but the money will be fully taxed in your top bracket (except to the extent that the withdrawal represents nondeductible contributions -- money on which you paid federal income taxes on before stashing it in the IRA).

  Roth IRAs offer an even better deal for first-time home buyers: You can withdraw 100% of your contributions tax- and penalty-free at any time (for first-time home purchase or anything else). On top of that, you can take up to $10,000 of earnings penalty free. And, if your Roth has been opened for at least five years, those earnings are tax-free, too.

Next: Choose a Broker

MORE: Kiplinger.com | The Basics of Money | Getting Started

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