One way to buy a house if you're short of money is through the federal government, which has been holding auctions around the country for the last year to dispose of property it got from busted S&Ls.
The auctions are held by the Resolution Trust Corp., set up by Congress to handle insolvent savings and loans.RTC spokesman Stephen Katsanos said the single-family houses offered at auction include many that were repossessed when the owners could no longer make payments, but also some new properties put up by builders or lenders who ran out of money.
After a year of auctions, the RTC has sold 16,000 properties under an affordable housing program to buyers whose incomes average $21,900, and it has many more available.
"I would expect over the summer there's going to be some very aggressive auctioning going on," Katsanos said. "The single-family houses for us take a lot of staff time and don't result in a tremendous recovery for the taxpayer. We've been really trying to move them out quickly."
You can find out when an auction is coming up by calling a central toll-free number - 1-800-RTC-3006 - or contact an RTC office in your area.
There are regional headquarters in Kansas City, Dallas, Denver and Atlanta and RTC sales offices in Phoenix; Houston; San Antonio; Tulsa; Tampa; Costa Mesa, Calif.; King of Prussia, Pa.; Somerset, N.J.; Egan, Minn., and Elk Grove Village, Ill.
Parts of the auctions are open to all comers, but some houses are reserved for the agency's affordable housing program, meaning only people with low or moderate incomes can bid.
The income cap varies by region and family size. Generally, you can earn up to 115 percent of the median income for your area and still qualify as a moderate income buyer. In Washington, D.C., for example, a single person with an income as high as $38,250 would qualify.
Houses sold in the affordable housing part of the auction must have a market value of $67,500 or less.
If you're just interested in the affordable housing part of the auction, you can get information from the office of the national director of the program, Stephen Allen, 202-416-7346. Allen's office can direct you to local sources, including non-profit agencies in your area that are working with the RTC.
Before an auction, the RTC often holds fairs where you can find out whether you qualify to bid in an affordable housing auction, get a list of the houses available and learn exactly how the auction is conducted. You can inspect the properties that interest you and decide in advance which ones you want to bid on.
In some cases, RTC will also help with financing on the house and subsidize the interest rate, which means you might be able to afford much more than you think.
"It's really not a painful experience," Katsanos said. "We've gone through a lot of what we have already, but there's still substantial properties."
If an auction doesn't appeal to you, there are other options available in most states for potential homebuyers of low and moderate income.
Among these are more than 600 programs for homebuyers operated by state housing finance agencies, according to the National Council of State Housing Agencies in Washington.
The state finance agencies are located in the capital of each state, but you can get information on them by calling a state office in your town. Many of the agencies subsidize mortgages for homebuyers and also help with closing costs.
Another route is to contact local non-profit agencies, which often know about or are involved in efforts to make housing available to people of moderate means.
If you're comfortable talking to lenders, phone several to see if they offer any programs designed to help first-time homebuyers of limited income.
For example, some lenders have what's called a 3-2 Community Home Buyer's Program. It can get you into a house with a down payment of just 5 percent - 3 percent of your own funds and a 2 percent grant or loan from a family member, a state agency or a nonprofit group.
Under this program, you can spend up to 33 percent of your monthly income on housing, much higher than the usual ceiling of 28 percent. More than 400 lenders now offer the 3-2 program, according to the big secondary mortgage lender Fannie Mae, which set it up.
It may take some energy and determination to find these programs. But if you really want to buy a house, it's worth the effort.