(MONEY Magazine) – In this election year, President Clinton and Republican contender Bob Dole have vowed to provide tax breaks and other incentives to help more renters--now about a third of American households--become homeowners. But if lack of money for a down payment is all that's barring you from buying a home, you don't have to rely on a politician's promise. Fact is, financing a house without a pile of ready cash is getting easier every day. "The popularly held notion that you need 20% down just isn't true anymore," says Keith T. Gumbinger, vice president at mortgage trackers HSH Associates. Almost half of today's home buyers make down payments of 10% or less, and many manage to squeeze into a house putting as little as 3% down.

Low-down-payment mortgages carry roughly the same rate as conventional ones (recently 8.5% for 30-year fixed-rate loans). But lenders require that borrowers who put down less than 20% of their home's purchase price buy mortgage insurance, which covers the bank in case you default on the loan. Typical cost for this coverage: one-half to three-quarters of a percent per year of the loan amount.

Besides the monthly insurance payouts, there is a more serious drawback to plunking down 5% or less. If you decide to sell your home and real estate values in your area have stagnated or declined, the price you get may not be enough to cover your mortgage balance and typical 6% sales commission. So unless you plan to stay in the house long enough to build some equity--say, at least five years--you should probably avoid a low-down-payment loan.

Here's a rundown on where to get mini-down-payment mortgages.

--Affordable housing programs. In October, Freddie Mac--a government-sponsored company that purchases mortgages from lenders--began allowing low- and middle-income home buyers to put down as little as 3% on 30-year fixed-rate loans. (Another lender, Fannie Mae, has run a similar program since 1994.) To get these mortgages, your family's income must not exceed the median income in the region where you live. In high-cost areas, however, the cap is more generous. For example, buyers in California cities may earn 20% more than the local median income. You can get details on Fannie Mae loans by calling 800-732-6643; for more on Freddie Mac's program, get in touch with a local bank or mortgage lender.

--The Federal Housing Administration. The FHA also runs a program that helps home buyers get mortgages for as little as 3% down. There's no income restriction on the FHA program, but the loans are capped at amounts ranging from $78,660 to $155,250, depending on the cost of housing in your area. For details on FHA mortgages, call 800-225-5342.

--Private lenders. Most banks, savings and loans and mortgage bankers will accept 5% down, as long as you pay for mortgage insurance. If 5% is still too much, Crestar Mortgage will let you finance 100% of the home's price, provided you pledge as collateral a certificate of deposit from any bank equal to 3% of the mortgage. (Crestar, based in Richmond, makes no-money-down loans in more than 40 states; call 800-452-5363 to learn whether yours is one of them.) To find local lenders that require little or no up-front cash, shop around, or call HSH Associates (800-873-2837) and ask for its weekly survey of mortgage offerings for your area. Cost: $20.

--Ellen Stark