Gone are the days of sub-prime mortgages, stated-income, and zero down loans and loans for folks with no credit scores. Gone also are the creative financing options that allowed sellers to carry back a note for part of your down payment.

Maybe they’ll come back as part of the government’s “bail out” program, but it isn’t very likely. Lenders will probably continue to be cautious, and to lend only to those borrowers with high credit scores and money in the bank.

So if your credit scores are low, are you doomed to living in a rental for years until you can raise your scores and save a large down payment? No, you’re not. There is another way.

You can look for lease to own properties, and seller-financed homes.

Remember, homeowners who need to sell are in as much of a bind as borrowers. The pool of buyers who will qualify for loans is getting smaller and smaller as lenders tighten their requirements, so fewer homes are selling.

For sellers who have to move, this is a crisis of major proportions.

Thus, more and more sellers are entertaining the idea of seller financing and lease to own arrangements. In fact, some entrepreneurs are buying up under priced properties for the express purpose of reselling them to buyers who are unable to get a mortgage.

The down side of seller financing is that it usually comes with a higher interest rate than those we’ve seen in the past few years. That means you’ll get less house for the same payment. You need to weigh the costs of renting versus buying - and be careful not to purchase an over-priced home.

That leaves “rent to own” or “lease-purchase” arrangements. You’ll be paying a few dollars over fair market rent, and those dollars will be applied to your down payment. Thus, you’ll be building equity each month.

But do be careful. Read ALL of the fine print before you sign anything. Many “rent to own” companies require you to get a loan and cash them out within a set time frame. If you can’t do it, you’re out and all payments made toward the down payment are kept as “liquidated damages.”

Call your favorite lender and ask if your credit score qualifies you to purchase a home. If not, work on raising your credit score while you search for seller financing or a lease option.

Despite the credit crunch and gun shy mortgage lenders, there are still ways to purchase that piece of the American Dream

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