If you're thinking about buying a home, you may have been discouraged by reports that mortgage lenders are now requiring high credit scores and large downpayments.

After all, it's one thing to be able to afford a monthly mortgage payment, but quite another to come up with a 20 percent deposit, which is the amount needed for a loan without the added cost of mortgage insurance.

The monthly payment on a $150,000 mortgage would be just $740 at current interest rates, but a 20 percent downpayment on that same loan would be a whopping $30,000.

For most individuals and families in the South Carolina, there's a state-sponsored mortgage program that could help tremendously. It offers competitive loan rates that are now at historic lows, downpayments of just 3 percent, and downpayment assistance.

The lending is aimed at first-time home buyers, but you don't actually have to be a first-time buyer. And it's aimed at people with low to moderate incomes, but the income limits are generous and the majority of families would qualify.

The program isn't a handout, and it doesn't use taxpayer money. The S.C. State Housing Finance and Development Authority borrows money by issuing bonds, uses the proceeds to finance mortgages issued by commercial lenders and repays the bonds with the payments on those mortgages.

For people in many middle-class jobs, the authority sweetens the loan deal even more with its Palmetto Heroes program. South Carolina teachers, law enforcement and corrections officers, firefighters, nurses, emergency medical personnel and veterans are offered a lower 4 percent interest rate and up to $5,000 in downpayment assistance.

What's the catch? I have no first-hand experience with the authority's program, but I've scrutinized the fine print and couldn't find a catch.

Buying a house or condo isn't the right choice for everyone, but real estate prices are down, interest rates are at record lows, housing affordability is near a 7-year high, and this loan program looks like a good option for potential homeowners with limited downpayment funds.

You can find all the details of the first-time home buyers program at www.schousing.org. Here are the basics:

--A minimum credit score of 620 is required. Don't know your score? You can get your credit report at no cost, and purchase your credit score information for a small fee, by visiting www.annualcreditreport.com or calling 877-322-8228. This is the official site for free annual credit reports required under federal law.

--For a family of three, the maximum gross income to participate is $87,080 in Berkeley and Dorchester counties, and $71,530 in Charleston County. The income limits are lower for couples and single applicants.

--The authority offers up to $4,000 in downpayment assistance ($5,000 for Palmetto Heroes). Depending on your income, the money either becomes a second loan with no payments due for the first three years, or, if you earn less than 80 percent of the median income for your area, you won't have to pay the $4,000 back if you live in the house for 5 years.

--A tri-county area family of three earning $44,800 or less would qualify for the forgivable loan assistance. Applicants in that income group must complete a home buyer education course to obtain a loan through the authority's program.

--The interest rate is 4.25 percent (4 percent for Palmetto Heroes). You can find out what the monthly payments would be by using the loan calculator on the authority's website.

It's called a first-time home buyer program, those who have owned a home, or who currently own one, can still qualify.

In Charleston County and other "nontargeted" counties, you're a "first-time home buyer" if you haven't owned a home in three years, and that requirement is waived if you're a single parent or are disabled.

In other counties, including Berkeley and Dorchester, it doesn't matter if you've owned a home before, so long as you don't own another home when you close on the one you're buying with through the authority's program.

Reach David Slade at 937-5552.