Once you've found the house, it's time to shop for some money.
Banks, nonprofit housing groups and the government have developed many programs for first-time buyers, giving almost anyone with about $5,000 cash a chance to become a homeowner. Here are just a few.
L For more information about any program, call a local lender.
* State CDA loans.
Several times a year, the Maryland Department of Housing and Community Development issues millions of dollars to lenders that allow buyers to finance 100 percent of the purchase price of a house.
The last Community Development Administration loan fund, issued in December 1994, was $73.2 million. CDA loans were made at 7.5 percent to borrowers with annual incomes of $31,350 or less, and 8 percent to borrowers with incomes of $49,650 or less.
The state requires buyers to put down a percentage of their income in cash for part of the closing costs. But none of the money has to be their own. A family member can give it to the buyer as a gift.
The rub: CDA loan funds are released only a few times each year and are used almost immediately. CDA may issue bonds three or four times this year. Lenders are taking advance loan applications.
For more information, call CDA Homeownership Programs: 800-638-7781.
* Community Home Buyer "3-2 Option" loans.
Many lenders participate in this loan program, backed by Fannie Mae, the Federal National Mortgage Association. The loans are for homebuyers whose income is not more than the local median level: $49,400 in the Baltimore area. Residents who live in the city are exempted from the income limit.
Buyers must produce at least a 5 percent cash down payment, but only 3 percent of it needs to be their own. The other 2 percent may come from the seller, the lender, relatives, or from a church, nonprofit group or government agency.
* FHA financing.
Federal Housing Administration loans are insured by the federal government and are available from most lenders. They typically require a 3 to 5 percent cash down payment from the borrower, with closing costs also paid in cash.
Some lenders offer interest rate or point breaks to low-income homebuyers.
* VA financing.
An American veteran with an honorable discharge may qualify for a loan backed by the Department of Veterans Affairs. VA loans require no down payment. Cash needed at closing could be just fees and prepaid expenses -- and the seller may pay those.
* Premium pricing loans.
For buyers with good incomes who are just short on cash for a down payment, some lenders contribute money toward closing costs in return for a higher interest rate.
Buyers must have a payment that typically won't be more than 29 percent of their gross income, and a monthly debt plus monthly mortgage that won't be more than 41 percent of gross monthly income. That's known as a 29/41 ratio.
* Pay no points.
A buyer who can convince a seller to pay all the loan points may save thousands of dollars. In return, the buyer may have to agree to a higher sales price or make other concessions to the seller.
Some companies, such as Baltimore American Mortgage Corp. in Hanover, pay the buyer's share of prepaid costs at closing. They require buyers to use the company's own title company and charge a higher interest rate on loans, however. For information, call Baltimore American Mortgage Corp., 859-4100.
* Nonprofit homeownership group loans.
Some counseling groups in the city occasionally have funds to loan low-income people who want to buy homes in their neighborhoods. Neighborhood Housing Services (NHS), a nonprofit group in Baltimore, makes mortgage loans up to $40,000 from a revolving loan pool. It also arranges tandem mortgages to help buyers bridge the difference between what a lender gives them and what they need to move in.
For information or referrals, call NHS, 327-1200; or Maryland Low Income Housing Information Service, 727-4200.
* Settlement expense loan programs.
First-time buyers in Baltimore, parts of Baltimore County and other areas may qualify for programs that loan families up to $5,000 each to pay for closing costs.
Baltimore's Settlement Expense Loan Program is coordinated through the city's Home Ownership Institute. NHS offers its own closing cost loans for new homebuyers in neighborhoods north of Patterson Park and in ZIP code areas 21216 and 21229.
For more information, call the Baltimore Home Ownership Institute, 396-4606; NHS, 327-1200; or Baltimore County Department of Community Development, 887-4000.
* Lease-purchase, or rent with option to buy.
Lease-purchase and rent-with-option deals both give buyers time put aside enough money for a down payment, or clean up a messy credit record. The buyer rents the house for a specified length of time from the seller, who cannot be in a hurry to move and may not sell the house to someone else.
For information, call St. Ambrose Housing Aid Center, 235-5770.
* HUD repossessions Buyers may find good deals with little cash down from HUD properties for sale. Most of the homes in HUD's inventory are repossessions or in need of repair. HUD negotiates each sale separately with the buyer.
A list of HUD homes is published each week in the real estate section of the newspaper. For more information, call HUD at 962-2924.
* Rehabbed properties.
Area developers are rehabilitating several residential projects for low- to moderate-income home buyers. Often backed by federal funds, their projects allow buyers to get a home with very little cash in hand.
To qualify for the program, buyers must have a household income of 60 percent of the median Baltimore income. The median is about $49,400 for a family of four.
* Builder buy-downs.
Some new-home builders may agree to pay part of the buyer's share of points or other expenses to reduce the cash requirement at closing.