Good news for first-timers: across the nation, home buying programs help families five their dreams.

Who says a lack of fund or bad credit means you can't purchase the home of your dreams? Those may have been insurmountable obstacles in the past, but not anymore. New opportunities are emerging nationwide, thanks to a range of innovative mortgage programs to aid first-time home buyers who had been previously locked out of the housing market. From down payment assistance plans to credit workshops, home buying initiatives are sprouting up everywhere.

Stephanie Maddrey reaped benefits of two such programs. The 37-year-old administrative specialist purchased a $104,000, three-bedroom row house in the Overbrook Park section of Philadelphia in October 2006. Her out-of-pocket costs were just $2,100, largely because she received $5,800 from two different grants earmarked for first-time home buyers.

The first grant came from First Front Door, a community-based initiative in which her mortgage lender, Sovereign Bank, participated. "They gave me $5,000 toward the purchase of my home," says Maddrey. "I had to attend two informational sessions for two hours each." As long as she resides in the house for five years, she won't have to repay the money. However, if she moves out before then, the $5,000 will become a loan with interest.

The second grant for $800 came compliments of the city of Philadelphia Department of Housing. To qualify, Maddrey had to attend a counseling session on home buying, mortgage financing, and credit management. "I got a list of housing counseling places and found one close to where I work," she explains. "I went there on my lunch break and I was done with the counseling before my lunch hour was up." Maddrey says that many people either don't know about these grants or they don't know how easily they can get them.

During the counseling session, Maddrey found out that her credit score was good enough for her to qualify for traditional financing. She also learned how to steer clear of predatory lending practices.

Many home buyers like Maddrey are finding they qualify for down payment or mortgage assistance. Each year, the U.S. Department of Housing and Urban Development gives states and municipalities money to distribute to low- and moderate-income families to put toward their down payment or dosing costs. Potential homeowners can receive up to $15,000. In some cases, the money is made available as a loan that's forgiven if a home buyer stays in the home for three to five years. Some programs offer up to 10% of the purchase price. To qualify for down payment assistance, a person typically can earn no more than 80% of a region's median income.

Maddrey came across various programs for home buyers after conducting research online. The first stop for prospective home buyers should be their state housing finance agency. There are 58 such agencies listed on the National Council of State Housing Agencies' Website at www.ncsha.org. Home buyers can also check with their city's community development office or mayor's office about grants and other programs for first-timers. Home buyers shouldn't overlook their church leadership or local community groups, which might know of housing assistance programs in the area.

By tapping into grant money, Maddrey and her fiance, Gary Weatherbe, have been able to combine their savings to build a cash cushion for the house plus fund their upcoming wedding. "It feels really good" to be a homeowner, Maddrey says, especially because her two sons, Arrin, 12, and Mekhi, 1, now have a place to call their own and no longer live in a cramped two-bedroom apartment. "We're decorating everything now and really making it home."

Programs For 1st Timers

Banks, financial institutions, and even nonprofit groups are making it easier than ever for you to go from tenant to homeowner. The following is just a sampling of what's out there.

Wells Fargo (www.wellsfargo.com). The Home Opportunities program is available to public employees and members of the military. It offers no-money-down, up to 100% financing on a single-family home, condominium, co-op, or multi-unit property. Wells Fargo's "Easy-to-Own" program offers low down payment options of just 3% or 5%. The bank is also an active participant in more than 1,500 down payment assistance programs across the country.

Washington Mutual (www.wamu.com; 877-800-9268). WaMu offers potential home buyers deferred payment or low-interest loans, down payment and mortgage assistance, and shared appreciation mortgages. The bank is a participant in state programs targeting first-time home buyers with low to moderate incomes and limited funds for a down payment. Qualifications for receiving grants and actual amounts awarded vary from state to state.

The Neighborhood Assistance Corporation of America (www.naca.com; 888-302-NACA). Services from this nonprofit community advocacy and housing organization include home-buying workshops, financial counseling, and home evaluations. NACA offers below-market-rate loans, currently at 5.5%, and mortgages that feature no down payments, no closing costs, and no application fees. To meet eligibility qualifications, applicants must sign up for a free workshop, cannot own other property, must live in the home they're purchasing, and must meet certain income requirements.

The Nehemiah Program (www.nehemiahcorp.org; 877-634-3642), This is the nation's largest privately funded down payment assistance program. Over the past decade, Nehemiah has provided roughly $875 million to more than 225,000 families. Among the features of The Nehemiah Program are gift funds up to 6% of the final contract sales price to put toward down payment and/or closing costs and financing for new construction or the purchase of an existing home. What's more, there are no income, asset, or geographical restrictions to qualify.