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• Cash. For parents with the means, cash is clean and easy. An individual can give $12,000 a year to a recipient without having to pay a tax on the gift. Therefore, a couple could give an adult child and the child's spouse a total of $48,000 in one year. To keep things simple, the gift is best given well in advance of the mortgage application.

• Cosigning or otherwise jointly investing in the property. This can work for parents of more limited means or those who want to be paid back. The biggest risk is that the offspring will be unable to meet their obligations and it will affect the parent’s credit rating.

• Knowledge and hard work are worth gold. Parents who can’t afford to help financially may be able to provide experience and even some sweat equity to help the kids make a smart housing choice.

These brochures are available to you through your local REALTOR Association. Please stop by your association office and you will be given a supply of brochures AT NO CHARGE! The brochures will be available starting March 31st.

There is a consumer website with first time homebuyer information at www.warealtor.org/homebuyer and we have set up a website at www.warealtor.org/media/download.asp with campaign materials and website banners for you to promote the campaign and your expertise assisting first time homebuyers.

• Cash is king. Having enough money in the bank to pay closing costs that are typically an additional 2 percent to 3 percent of the price of the home is necessary.

• Location. Location, location. As any good real estate professional knows, homes in good school districts where the crime is low are much more likely to hold or increase their value.

• Compare. Besides just looking at the comps, buyers should examine what it would cost to rent a similar house in the same area and they might consider what it would cost to buy land and build a comparable home.

• Think long haul. It will probably take at least six or seven years of living in the house to be able to sell and come out ahead.

Home values have declined across the country, giving homebuyers the best buys they've had since 2004.

Home prices have dropped so quickly and so far that valuations - the difference between what a home should cost and its actual price - are the lowest they've been since 2004, according to a report.

The Cleveland-based bank National City Corp. (NCC, Fortune 500), together with financial analysis firm Global Insight, revealed Tuesday that more than 88% of the 330 housing markets surveyed showed price declines and improved affordability during the last three months of 2007.

"Housing valuations are almost back to long-term norms," said National City's chief economist, Richard DeKaser. He called current affordability "the best in the past four years."

But DeKaser cautioned that home prices could fall even further.

"This isn't to say home price declines are over," he said. "We could move below historic norms. By the end of 2008, housing markets could be broadly under valued."

There are still 21 housing markets, or 6% of those surveyed, that are severely over valued, including Atlantic City and Madera, Calif. That's down from 56 overvalued markets at the peak of the housing bubble in 2006.

The report compares actual median home prices with what the authors determine are proper home values based on population density, relative income levels and interest rates, as well as historically observed market premiums or discounts, to determine whether markets are over or under valued.

The report also factors in market intangibles that make some areas more desirable places to live, and more expensive.

"Declines are no longer confined to once-frothy markets," said DeKaser.

The survey covered home valuations during the last three months of 2007, but DeKaser pointed out there's reason to believe that valuations are even more favorable for buyers today.

Price declines have continued into 2008 and interest rates, although they have inched up lately, have been steady or lower compared to late last year. There have even been wage gains; personal income rose 0.5% in December. Soaring foreclosure rates have added inventory to many housing markets, depressing home prices further.

The biggest gains in affordability occurred in California, Michigan and Florida, which are areas that have also been some of the hardest hit by foreclosures. Those states registered 43 of the 50 biggest price declines.

Bend, Ore. currently tops the overvaluation list. Home prices there were judged to be about 59% higher than their fair-market value. Miami, despite a median home price decline of 5.7% last year, is the most overvalued big city, by 44%.

All the best bargains were found in Louisiana and Texas. Houses in Houma, La. were under valued by 31.2%, according to the report. Dallas was the most undervalued big city, by 30%

The troubles in the subprime mortgage market have led to tighter standards for all borrowers. Buyers and refinancers with sterling credit records won't feel the pinch. But lenders have reined in their underwriting rules for borrowers with less-than-perfect credit and for those seeking nontraditional loans that require a low initial payment or little verification of income. Now, rising home prices can no longer serve as the ultimate guarantor of a home loan.

How will tighter underwriting standards affect me? Buyers stretching to afford their first home will be hit hardest. The days of heroic efforts to help first-time buyers "afford" a home are over, says Bill Hampel, chief economist for the Credit Union National Association. When borrowers apply for an adjustable-rate mortgage, lenders will approve or reject them based on the fully indexed interest rate and higher monthly payment, not a "teaser" rate and low initial monthly payments. New disclosures may also add to the pile of paperwork you sign at closing.

Can I still get 100% financing? The availability and pricing of 100% financing and piggyback loans – for example, the 80/20, with an 80% first mortgage and a 20% second, designed to avoid the cost of private mortgage insurance (PMI) – are largely driven by your credit score. (Based on the FICO model used by most mortgage lenders, scores range from 300 to 850.) As credit scores start to dip below 700, loan options begin to disappear. For example, an applicant with a score below 700 would not qualify for an 80/20 mortgage but could get 100% financing with PMI. With a score of 620 or lower, you probably wouldn't be able to get 100% financing.

Is it better to make a down payment? You're almost always better off making a down payment, says one Chicago mortgage broker. "I lean toward putting at least 5% down," he says. "You'll be eligible for many more loan programs, so you can compete on rate." Lenders also want you to have at least two months of PITI (principal, interest, taxes and insurance) in reserve. Financial assets, such as 401(k) accounts or IRAs – from which you could withdraw funds to make a mortgage payment in an emergency – qualify, but lenders count only 70% of their value because of the taxes and penalties you'd pay if you were to withdraw the money. On the bright side, the outlook for prices is that they'll remain soft for the next several years and you'll have time to save for a down payment without worrying that home prices will soon be out of reach.

Before I shop, should I pay down debt? Debt is not as important to lenders as your down payment and credit score when it comes to assessing risk, but it's still important. The standard debt-to-income ratio used by lenders is 28/36. Under that guideline, your monthly mortgage payment can't exceed 28% of your monthly household income, and your total debt payments may not exceed 36%. (Federal Housing Administration loans and loans backed by the Department of Veteran Affairs allow a higher ratio of 29/41.) Our Chicago-based broker says he has seen the debt limit hit 60% for a borrower with a 30% down payment and a credit score of 800. He says he hasn't seen lenders pull back on the ratios yet, but he wouldn't be surprised if they did.

Is it worth waiting to buy until I can improve my credit score? Probably. The average rate on a 30-year fixed-rate mortgage is typically at least 1.5 percentage points lower for someone with a credit score of 760 to 850 than for someone with a score of 620 to 639. On a $216,000 loan, a borrower with a top-tier score would pay $232 less per month – a saving of $2,784 per year – than a borrower near the bottom, according to MyFICO.com.

You're entitled to one free credit report a year from each of the three major credit-reporting agencies (go to www.annualcreditreport.com). At least six months before you apply for a mortgage, request your report, correct any errors, and take action, such as paying down debt, to improve your score.

Could the appraisal derail my deal? Lenders may require a more thorough appraisal – perhaps a full interior and exterior inspection and measurement, instead of a drive-by – or even two appraisals in markets where prices have been the most volatile. Mike Evans, an appraiser in Chico, California, and a spokesman for the American Society of Appraisers, says that the less money you put down, the more the home's market value will be scrutinized. You needn't fear the appraiser if you and your agent have done your homework. A good agent will provide a comparative market analysis of recently sold properties so that you can make a realistic offer. And if you include an appraisal contingency in your offer, you'll get your earnest money back if the price you've negotiated fails to match the appraisal.