2. 100% Federal Financing Offers

Believe it or not, you can still buy a home with no money down. Federal and state governments offer to cover the down payment for you if you don't have the cash.

Typically, to qualify for a Federal Housing Administration-insured mortgage, borrowers must make a minimum 3.5% down payment. (FHA-insured mortgages currently account for 30% of mortgage volume, says Chip Cummings, president of Northwind Financial, a Grand Rapids, Mich.-based training and consulting firm for mortgage and realtor firms.) However, in certain states, you don’t even need to have the 3.5% down payment. California, Colorado and Pennsylvania, among other states, offer to cover that amount in the form of a second mortgage. (Such deals can be risky, though. Read our story to learn more.)

Also, the Department of Veteran Affairs offers up to 100% financing to veterans. And the Department of Agriculture covers up to 100% of the financing for homes purchased in a rural location.

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