A dream of a home: the AmeriDream Charity gives the gift of down payments. (Real Estate Strategies).

Once Elgie and Gall Johnson could no longer bear the 45-minute commute from their home in Fort Worth, Texas, to his job as a tax consultant at PriceWaterhouseCoopers and her job as a grants management specialist with the U.S. Department of Agriculture in Dallas, they began investigating various financing vehicles to help them purchase a new home. Two lenders approved Elgie and Gail, age 33 and 34, respectively, for a $175,000 mortgage, but that would be a challenge. They built their first home for $70,000 and had a mortgage of about $750; the new monthly payment would be $1,500--that's a 150% jump in their mortgage.

A property appraisal revealed that the couple had amassed about $30,000 in equity in the first home they built in 1995. However, they wanted to use the funds to pay down $12,000 in credit card debt--at 18% and 20% interest--that they had accrued while in college.

When reviewing different loans for the 3,100 square-foot home they decided to build in Desoto, Texas, the Johnsons considered accepting a slightly higher interest rate to get a government insured FHA loan that only required a 3% down payment. Under federal income tax laws, they could withdraw money from their 401(k) retirement plans to buy the home without paying a penalty. Another option, a five-year adjustable rate mortgage, would start with a lower interest rate--thus giving them lower payments. But the gamble didn't seem worth it.

"Our thinking was that interest rates are low and that we were going to do biweekly payments to pay off our loan faster," says Elgie. "But in five years, interest rates will probably be higher."

While choosing the final amenities for their home, the Johnsons met Countrywide Financial Services mortgage consultant Aronji M. Johnson. After the couple met with Johnson, she recommended they apply for a home-buying grant through AmeriDream Inc. Under a new ruling by the U.S. Department of Housing and Urban Development that allows nonprofits to provide unlimited home-buying assistance, the national organization has covered the down payment and closing costs for several of Johnson's clients over the last two years.

Through a process that satisfies all parties involved, AmeriDream (866-263-7437; www.ameridreamcharity.org) provides home buyers up to 10% of the purchase price in assistance. The seller, or in the case of the Johnsons' new home, the builder, reimburses AmeriDream for the gift. The home buyer gets the property, the lender makes a new loan, the builder sells another home, and the nonprofit collects an administrative fee of $325-$600 from the builder, or 0.75% of the sale from the seller to continue operating. It's a package most sellers jump at, Johnson says.

"There's always room in the purchase price in case the [buyer needs] help with closing costs. If the builder is not a participant, it doesn't mean he [or she] won't use AmeriDream. Ask. It helps the builder move homes, and we know the down payment is the No. 1 obstacle to buying a home," says Johnson.

Gail initially hesitated on the decision to go with AmeriDream because the couple had been approved for conventional loans at prime interest rates, and the AmeriDream deal required they pay a slightly higher purchase price. Elgie thought it a rare opportunity and just good business sense. Unlike most home buyer assistance programs, AmeriDream doesn't limit its aid to first-time home buyers, nor does it place income caps on recipients. After canvassing the neighborhood to make sure the final purchase price was in line with resell prices of existing homes, Elgie convinced Gail that the trade-off of a higher purchase price was worth it. "Any little bit helps. I know plenty of our friends whose credit is shot, and [who] must go through a lot to get a new house. We don't have to," says Elgie. AmeriDream ultimately gave the Johnsons $5,220 toward the down payment on a 6.25% mortgage through Countrywide.