Credit: Charles Krupa, AP

Due to the shock of the financial crisis and the housing bubble, conventional lenders are extremely shy about lending right now. Although they are writing some loans, the fact still remains that they are VERY hesitant to take any risks. As a result, conventional loans are harder to obtain than they were a few years ago. However, there are some alternatives, primarily through government-backed loan programs, available to prospective home buyers that require a reduced down payment, lower credit scores and more paperwork.

Scott Tripp, a home mortgage lender at BB&T headquartered in Winston-Salem, N.C., has estimated that in the near future, 50 percent of loans for new purchases will be acquired through non-traditional funding sources such as state housing authorities, the Federal Housing Administration, the U.S. Department of Agriculture and the U.S. Department of Veterans Affairs.

These loan programs offer buyers, who are able to make monthly mortgage payments but do not have the funds reserved to make a down payment, a way to purchase a home. Therefore, assistance from the aforementioned funding sources may represent the only opportunity of some buyers to ever purchase a home.

For example, the S.C. Housing Authority, formally entitled the South Carolina State Housing Finance and Development Authority, has a First-Time Home Buyer Mortgage Loan Program. This program is beneficial because it assists low-to-moderate income South Carolina families and individuals by offering a competitive market fixed interest rate mortgage loan. In addition, based on availability, S.C. State Housing offers down payment assistance, which may be used toward a down payment and closing costs.

The Federal Housing Administration, also popularly referred to as the "FHA," provides mortgage insurance on loans made by FHA-approved lenders throughout the United States as well as its territories. The FHA is helpful because it insures mortgages on single family and multifamily homes. According to the FHA site, it is the largest insurer of mortgages in the world as it has insured over 34 million properties since its inception in 1934.

The U.S. Department of Agriculture has its Housing and Community Facilities Programs (HCFP), which provide a great deal of homeownership opportunities to rural Americans along with programs for home renovation and repair. In addition, HCFP provides elderly, disabled, or low-income rural residents of multi-unit housing buildings with financing to ensure they are able to make rent payments.

The U.S. Department of Veterans Affairs offers veterans' a Loan Guaranty Program, along with a Specially Adapted Housing Program. The later provides veterans or service members who have specific service-connected disabilities with a grant specifically to construct an adapted home or to modify an existing home to meet their medical needs.

It is clear to me that because an agent's job is to direct their clients in the most effective and efficient way possible, it is essential that they be aware of all the finance options available to their clients. Therefore, it is critical that realtors educate themselves on these non-traditional funding sources that are gaining popularity in the market place. If you or a loved one are looking to buy a home in this difficult time, be sure to inform your agent about these non-traditional home financing options.