NEW YORK (CNN/Money) - The Census Bureau says home ownership is at record high with nearly 69 percent of all Americans owning their own home.

Nonetheless, high down payment and closing costs are among the most significant barriers to homeownership for first-time homebuyers. But now, for as many as 40,000 low-income families, that will change. Last December, President Bush passed the American Dream Down payment Initiative into law.

CNNfn's Gerri Willis shares five tips on becoming a homeowner. Play video (Real or Windows Media)

The act authorizes up to $200 million in assistance annually through 2007. The initiative is also expected to help the Administration meet its "Home ownership Challenge" to increase minority home ownership by 5.5 million families by the end of the decade.

If home ownership appears out of reach to you, here are today's five tips...

Although President Bush passed the American Dream Down payment Initiative in December, the administration is busy finalizing the regulation now.

The ADDI program is administered through HUD's (U.S. Department of Housing and Urban Development) already existing home program. Grants are expected to be made this spring.

To be eligible for ADDI assistance, individuals must be first-time home buyers interested in purchasing single-family housing. This includes a condominium, a co-op or even a mobile home. A first-time home buyer is an individual and his or her spouse who have not owned a home during the three-year period prior to the purchase of a home with ADDI assistance. Additionally, individuals who qualify for ADDI assistance must have incomes not exceeding 80 percent of their area's median income.

ADDI will provide down payment, closing costs and rehabilitation assistance. The amount of assistance provided under the program may not exceed $10,000 or 6 percent of the purchase price of the home, whichever is greater. Grants will vary by state, and grant sizes will be determined locally.

HUD officials say they expect as many as 40,000 families to be assisted by ADDI. The aid is given as a one-time grant. If the assistance is for rehabilitation, it must be completed within one year of the home purchase. Rehabilitation includes everything from putting in a new kitchen to fixing home health hazards such as mold and the threat of lead in paint.

If you need assistance you'll want to begin contacting your local governments this spring. For your state's contact information log onto www.hud.gov. On it you can find individual contacts for all 50 states. You can also call HUD at 202-708-1112.

If you find you don't qualify for the ADDI, the FHA insurance program is an option.

FHA stands for the Federal Housing Administration. The program is designed to help lower income first time home buyers. It only requires 3 percent down on a loan payment on a home as opposed to 5 percent or higher through conventional lending. On a $50,000 home, that's a down payment of $1,500, compared with $5,000-$10,000 for most conventional loans.

You will, however, have to meet certain credit qualifications. To get the HUD-insured loan, you'll need to apply to a HUD-approved bank, mortgage company or savings and loan association.

Also, keep in mind, that HUD is proposing a "zero down payment" program. This too would help remove the greatest barrier facing first-time home buyers -- the lack of funds for a down payment on a mortgage. A lot of consumers have the income to make mortgage payments and have good credit, but, can't overcome the hurdle of a down payment.

The big difference between the zero-down payment program and the ADDI initiative is that under the ADDI initiative the home buyer will receive an actual check under the grant to go buy a home. Under the zero-down program, the home buyer is not expected to put anything down for the down payment.

The zero-down program is not yet available. The earliest possible time it could become available is fall 2004. Projections indicate this zero-down program would generate about 150,000 home buyers in the first year alone. However, this program would not be for everybody. These home buyers will need to have decent credit and those who qualify would be charged a modestly higher insurance premium on their loans. It would also require families to undergo pre-purchase housing counseling.

They will rob you blind. Predatory lenders use several tactics to take advantage of you.

Among them, they sell properties for much more than they are worth using false appraisals, charge higher than normal interest rates to borrowers, and knowingly lend more money than a borrower can afford to repay. Another common tactic is offering below-market rates for a brief initial period, but then boosting rates to usurious rates later.

If you borrow more money than you know you can repay, you risk getting behind on your payments and losing your house. Also, don't ever let a lender tell you that they are your only chance of getting a loan or owning a home. You should always take your time shopping around.

And don't let a lender persuade you to make false statements on your loan application, such as overstating your income or the amount of your debt. Lying on a mortgage application may result in criminal penalties.

Finally, HUD says if a deal to buy, repair or refinance a house sounds too good to be true, it usually is! Compare interest rates you're being offered with others in the market either by checking out ads from large lenders in your area in the newspaper, or by pointing your browser to www.bankate.com or www.hsh.com.

Also, if you are worried that the lender you are working with might be a predatory lender, contact your state attorney general's office of consumer protection.

There are several charitable and other organizations out there that provide down payment assistance. While many, like Nehemiah and Ameridream, genuinely do help low-income families achieve their dream of home ownership, consumers need to beware.

There are lots of developers out there who build new homes and say they will help you with the down payment. You have to ask yourself if such an offer is driving up the cost of the home. The bottom line: they may be a resource, but be careful.

Part of the President's plan is to not only put people in homes but to keep them there. As a result, homeowners should put aside up to 10 percent of their annual housing expenses for unanticipated expenses -- an emergency fund.

What if the water heater blows? What if the roof needs fixing? You don't want to not be able to pay the mortgage because you had to pay someone to fix the furnace.

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It can't hurt to speak to a housing counselor if you have concerns being a first-time homeowner. To find a counselor near you call 800-569-4287 or go to www.hud.gov for a list of housing counselors.

Another tip: Before buying a home, hire an inspector to come in and take a thorough look around at the property and home. This could help avoid some problems when you first become a homeowner. If problems arise, determine ahead of time whether you or the seller is going to be responsible for paying for the repairs.

Gerri Willis is the personal finance editor for CNN Business News. Willis also is co-host of CNNfn's The FlipSide, weekdays from 11 a.m. to 12:30 p.m. (ET). E-mail comments to 5tips@cnnfn.com.