Virtually every state has programs to help first-time or lower-income buyers seal the deal on a home.

From low-cost mortgages to down payment assistance, these programs can lower monthly payments, provide cash for closing and make the numbers work for you.

A handful of loan programs were suspended during the recession because they ran out of money. But the funding is flowing again in most places.

Most of these programs are limited to buyers who haven't owned a primary residence for three years, unless they are buying in targeted areas.

Most also have restrictions on how much money you can make and the price of the home you want to buy.

You'll have to document your income, so steady work is a must and good credit definitely helps, though some programs go out of their way to help subprime borrowers.

Applying isn't any more difficult or time-consuming than applying for a conventional mortgage. Many of the programs work through networks of private lenders.

Here's the kind of help you can expect to find:

Loans with below-market or at least competitive interest rates. These generally are 30-year, fixed-rate loans. Most have income caps and some have caps on the purchase price of the home.

Cash for down payments and closing costs. Amounts vary, and there generally are income caps and other restrictions. But in some cases, these loans never have to be repaid if you live in the home long enough.

Loans toward the purchase or repair of foreclosed homes. Indiana was one of the first states to offer 0% loans using money from the federal Neighborhood Stabilization Program.

Eligible Hoosiers can apply for up to $15,000 toward a primary residence, with the possibility of $10,000 more through matching funds from a bank, to use for down payments and closing costs on a foreclosure.

Several other states have similar programs, including Michigan, Minnesota, Mississippi and Wisconsin, plus the District of Columbia.

Income tax credit programs. Mortgage Credit Certificates allow qualified applicants to claim 20% to 30% of the interest they pay each year as a federal tax credit.

That credit is subtracted from the amount a homeowner owes in income taxes, up to a maximum of $2,000.

The remaining interest still qualifies for the standard mortgage deduction, which is subtracted from a homeowner's taxable income.

Help for public-sector employees, people with special needs and others. Not every state offers this kind of assistance, but some have special mortgage loan programs for teachers, police officers and fire fighters, state and municipal workers, people with disabilities, health care workers, veterans and active-duty servicemen and women. North Dakota includes single-parent households in the mix.

Michigan and Ohio have home loan or grant programs geared toward helping recent college grads put down roots before they leave the state for jobs elsewhere. And North Dakota's Roots program targets new arrivals and Dakotans who have left the state more than a year ago but want to return.

First-time buyer loans and down payment assistance programs may not be for everyone, but it's smart to investigate what's available, especially if you've had credit problems.

Start by checking to see what's available in your state.

Here's where to find links to state first-time buyer programs. Remember -- these programs can change, so it's wise to check the Web sites periodically for updates.

By Kathy O'Gorman

Interest.com Contributing Editor

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