The latest Gallup Polls on consumer confidence aren't saying good things. Only around 5% of American consumers believe our economy is in good shape. And only about 12% think it's going to get better in the near future. But who can blame them? Housing prices have plummeted, foreclosures have been on the rise, and major lending institutions have recently found themselves on the verge of bankruptcy. The economy is practically the only thing we care about right at the moment.

And when phrases like "credit freeze" get thrown around, it definitely doesn't help things, especially when very little clarification tends to be given by those spouting it. That sort of talk unfortunately leads consumers to assume that it's impossible to get a loan on a car or a new home, which simply isn't the case. The U.S. Federal Government has actually taken multiple steps in order to attempt to insulate consumers from the current economic crisis and encourage continued activity in the consumer lending sector. While lending criteria has indeed tightened, many people are still able to receive home mortgage financing.

Now may in fact be the best time to buy a home. According to the National Association of Realtors, the average sale price of existing homes has dropped roughly 9.5%, which happens to be the largest fall since they began recording in 1999. The S&P/Case-Shiller 10-city housing price index also saw the steepest decline in its history, dropping about 17.5%. What this means is that those considering the purchase of a new home can potentially do quite well, as housing prices haven't been this low in a long time.

In addition to low property prices, new FHA lending regulations also favor potential borrowers. The limits on FHA-insured loans were increased from $362,790 to as high as $729,750, depending on the location. FHA loans are currently running fairly reasonable rates and only require a 3.5% down payment, even allowing family down payment assistance.

One interest thing to note for first-time home buyers is that if you make less than $75,000 a year, you can receive a tax credit for 10% of the final sale price of your new home, up to $7,500. This credit is available through July 1, 2009. While it is being called a credit, it's technically a loan. But it isn't often that you can find 0% 15 year loans, so it's a good thing as far as I'm concerned.

As I mentioned earlier, lending criteria has tightened a bit, and while minimum credit scores used to be in the low 500's, they now often range from the upper 500's to the low 600's. In addition, 100% financing has become a rarity given the current economic crisis, so it's reasonable to expect that you will need to put some money down. Lenders now typically require more documentation and proof of income as well.

It's hard to say who will and will not be approved for a loan, so you will likely best be served by visiting a CMP (Certified Mortgage Planner) who can help you figure out which lenders will finance you, and decide on the offer that best suits your individual situation.