Ask anyone who's paying $1,000 or more for rent every month why they don't just buy a house, and you'll likely hear them cite the single biggest barrier to homeownership - the down payment.

Traditionally, lenders have asked home buyers to come up with 20 percent of a house's selling price as a down payment on the mortgage. But with the average median home price hovering around $230,000, you would have to pinch pennies for years to save the $46,000 you would need to put 20 percent down.

Times have changed and so have lenders, who now will often finance 100 percent of the cost of a new house if the buyer also purchases private mortgage insurance. Zero down loans and government programs to assist with low down payments have put home ownership within reach for many who once could only dream about it.

There are, however, still significant advantages to making a down payment. First, you're almost certain to get a better rate that will save you thousands over the life of the mortgage. Second, you attain instant equity in your new home, and can borrow against that equity, meaning you really get to use that down payment money twice!

You now have many options for low or no down loans, or funding a larger down payment. Here is the low down:

• Some lenders will allow you to put just 5 percent down on a conventional loan if you also purchase private mortgage insurance to protect the lender in case you default on the loan, according to the Federal Trade Commission. Government assistance programs by the Federal Housing Administration, Veterans Administration or Rural Development Services can make down payment requirements even lower, the FTC notes.
• If you can't qualify for a zero down mortgage, you'll probably need to come up with at least 3 to 5 percent. If you're lucky enough to have a 401(k), you can borrow against it for a down payment. Most plans will permit you to borrow up to $50,000 or 50 percent of your balance, whichever is less. You will have to repay the loan, with interest, over a number of years.
• You can also take money out of an individual retirement account. Although you will be responsible for taxes on the withdrawal, your IRA administrator won't charge you an early withdrawal fee if you are a first-time home buyer and want to use the money as a down payment.
• Not everyone has an IRA or 401(k). In that case, many lenders will allow you to use gifts from family, friends or even a non-profit organization like your church, towards a down payment.
• Another way to avoid both down payment and PMI requirements is to get what is often called an 80/20 combo. You essentially take out two loans - a primary mortgage for 80 percent of the purchase cost, and a home equity line of credit or second loan (usually at higher interest rate) for 20 percent of the purchase price. While an 80/20 combo may cost you as much as a zero-down with PMI, the interest on both loans is usually tax deductible.
• If all else fails, you can always buy a lottery ticket or enter one of the many home-give-away contests that seem to have sprung up (think HGTV's Dream House contest). Or visit www.thefinalpayoff.com to enter for a chance to win $50,000 that you can use towards a down payment.

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