(NewsNation) — Homeownership has long been a cornerstone of the American dream, but for many, that goal feels increasingly out of reach.

Home prices have hit record highs, and buyers are having to put more money down than ever before. Mortgage rates have come down somewhat but remain double what they were just a few years ago. Meanwhile, a national affordable housing shortage has kept inventory tight.

All of that can feel especially daunting for first-time homebuyers, who may have a harder time pulling together a down payment without cash from a home sale.

Now, more young adult first-time homebuyers are relying on support from their parents to buy a home.

The good news is that there are many programs and resources to help first-time homebuyers. Some programs offer mortgages with more favorable loan terms, while others provide cash grants to go toward down payments or closing costs.

Here are a few options to look into if you’re a first-time buyer.

Low-down-payment conventional loans

Conventional loans are the most popular type of mortgage, but saving up the recommended 20% down payment can be difficult, particularly for first-time buyers.

Luckily, there are low-down-payment conventional loans provided by Fannie Mae and Freddie Mac — private, government-sponsored mortgage companies.

• Fannie Mae Conventional 97 Mortgage: Allows first-time homebuyers to put just 3% down and requires a minimum credit score of 620.
• Fannie Mae HomeReady Mortgage: Also requires just 3% down. Borrowers can’t make more than 80% of the area median income where the property is located. Very low-income borrowers can also apply for a $2,500 credit to go toward the down payment and closing costs.
• Freddie Mac Home Possible Mortgage: Offers low-income borrowers a 3% down payment financing option. The mortgage is available to qualifying first-time homebuyers as well as repeat buyers.
• Freddie Mac Home One: Helps more first-time home buyers afford a home, regardless of income or geographic location. Also allows for a down payment as low as 3%.

Government-backed home loans

Although not limited to first-time homebuyers, several federal programs make homeownership more affordable. The government doesn’t issue these mortgages but rather insures them, which allows lenders to offer more lenient terms than they would otherwise be able to.

FHA loans: Backed by the Federal Housing Administration, FHA loans allow you to put as little as 3.5% down and have lower credit score requirements than most conventional loans. The 3.5% down payment is available to those with a FICO Score of at least 580. Homebuyers with a lower credit score of at least 500 will have to put at least 10% down.

FHA loans can often be the cheapest option for borrowers with lower credit scores or a smaller down payment. 

VA loans: Available to veterans, service members and surviving spouses, the Department of Veterans Affairs backs these home loans, which usually don’t require a down payment or private mortgage insurance. The VA doesn’t have a minimum credit score requirement but lenders often do, typically at least 620, according to Veterans United Home Loans.

USDA loans: Home buyers in rural areas may qualify for a loan insured by the U.S. Department of Agriculture. Typically, down payments are not required, and the USDA does not set a minimum credit score, though lenders might.

Other government programs

The federal government has other mortgage programs to support specific groups. The Good Neighbor Next Door program is for law enforcement officers, teachers, firefighters and emergency medical technicians. It offers a 50% discount on homes in revitalization areas, provided you live there for three years.

There’s also Fannie Mae’s Home Path Ready Buyer program, which allows qualifying first-time homebuyers to receive up to 3% in closing cost assistance toward the purchase of a home that has been foreclosed on.

The Native American Direct Loan (NADL), guaranteed by the VA, provides financing to eligible Native American buyers. The NADL program has no down payment requirement or private mortgage insurance.

Bank grant programs

Banks like Chase, Wells Fargo and Bank of America offer grants that first-time homebuyers may qualify for. You don’t have to repay the grant funds, but they often have strict eligibility requirements based on your income, location, credit score and other factors.

The Chase Homebuyer Grant provides eligible borrowers up to $7,500 to lower their interest rate and other fees. It’s available to those with a Chase DreaMaker mortgage, Standard Agency loan, FHA or VA loan. The program is open to qualifying homebuyers in communities across 15 different metros including Atlanta, Chicago, Los Angeles and New York.

Wells Fargo’s Homebuyer Access grant provides up to $10,000 for a down payment. To qualify, borrowers can’t make more than 120% of the Area Median Income (AMI) in the county where the property is located. Eligible communities are spread across nine metro areas, including Dallas, Philadelphia and Washington, D.C.

America’s Home Grant Program is a lender credit of up to $7,500 offered by Bank of America. It can be used towards closing costs like title insurance and recording fees or to buy down the interest rate. Bank of America also offers a Down Payment Grant of up to $10,000 in down payment help. Both options have eligibility requirements tied to your income and where you live.

Nonprofit programs

Several nonprofit programs can help first-time homebuyers afford a home.

• The National Homebuyers Fund (NHF): Provides cash grants up to 5% of a home’s purchase price and is not limited to first-time homebuyers. It’s available in most U.S. states.
• Habitat for Humanity: A nonprofit that builds and improves affordable housing for those in need. To qualify, U.S. applicants can’t have a household income above 60% of the area median income. Once selected, homebuyers partner with the organization, performing “sweat equity” to help build their home.
• Neighborhood Assistance Corporation of America (NACA): Helps low-to-moderate income homebuyers in underserved communities afford homes. There is no down payment, no closing costs, no fees and no private mortgage insurance on a NACA mortgage. Read more about the eligibility requirements here.

State and local assistance programs

Many cities and states offer assistance for first-time homebuyers. These programs come in many different forms, including grants, down payment support or low-interest loans. Check with your state’s housing finance authority to learn more. You can find a full list here.

In New York City, the HomeFirst Down Payment Assistance Program provides qualified first-time homebuyers with up to $100,000 toward the down payment or closing costs.

The Florida Hometown Heroes Housing Program aims to make housing more affordable for teachers, firefighters and other community service members. Eligible borrowers can receive up to $35,000 in down payment and closing cost assistance.

The Texas Homebuyer Program is designed for first-time homebuyers and offers 30-year fixed mortgages below market interest rates.