For many people, especially first-time buyers, "the lack of a down payment is the typical hurdle" to homeownership, said Steve O'Connor, senior director of residential finance at the Mortgage Bankers Association of America. Today, however, there are numerous special programs with low down payments, some specifically designed for first-time homebuyers.

According to the Mortgage Bankers Association, there has been an expansion in the past few years of mortgages with low 3 percent down payments. You should check with your bank or financial institution about the requirements for any low down payment loans or first-time buyer programs they may offer.

Specific programs
You can contact these agencies directly for more information, or ask your mortgage banker or broker:

Fannie Mae
This major publicly-chartered corporation that buys mortgages from lenders and sells them to investors offers a mortgage known as Fannie Mae97, which features a loan-to-value (LTV) percentage of 97 percent. It requires a 3 percent down payment on either a 25- or 30-year fixed mortgage. It is primarily a loan for people with modest incomes who want to become homeowners. Borrowers must take a pre-purchase homebuyer education session to qualify for this loan.

Federal Housing Administration
This agency of the Department of Housing and Urban Development insures residential mortgage loans made by private lenders. With FHA insurance, you can buy a home with a down payment of from 3 percent to 5 percent of the FHA appraised value or the sale price, whichever is lower. FHA mortgages have a maximum loan limit that varies depending on the average cost of housing in a given region. Check out the latest bankrate.com survey of FHA mortgage interest rates.

Veterans Administration
The VA guarantee allows qualified veterans to buy a house that costs up to $203,000 with no down payment. In addition, the qualification guidelines for VA loans are more flexible than those for either FHA or conventional loans. To determine whether you are eligible, check with your nearest VA regional office.

Rural Housing Service
This agency of the Department of Agriculture provides financing to farmers and other qualified borrowers buying property in rural areas who are unable to obtain loans elsewhere. It offers low-interest-rate loans with no down payment to borrowers with low- and moderate-incomes who live in rural areas or small towns. Check with your local RHS office.

State and local government programs
Many states or local housing agencies sponsor programs to help first-time homebuyers who meet specified income guidelines. These programs offer loan terms with a low down payments and/or low interest rates. Some state and local programs also may offer down payment and closing cost assistance. Check with your state or local housing authority.