Here in Austin real estate experts are concerned that potential home buyers are misinformed about the local impact of the credit crunch. They want to dispel myths about the kinds of loans that are available.

Jennifer and Trevor Montgomery admire the hills of Lakeway from the balcony of a home they wouldn't have been able to afford one year ago.

"We bought this house for below what the builder's cost was," Jennifer Montgomery said. 

The Montgomerys took advantage of what some realtors say is one of the best times to buy in the past 20 years. Prices are falling and so are interest rates. But a lot of homes continue to sit vacant.

"People are nervous. It's unfortunate because it's a great time to buy," Mortgage Planner Sarah Ringstrom said. 

Sarah Ringstrom with SWBC Mortgage says the Federal Housing Authority is very lenient on credit scores. If you have a score above 580 you can get a loan for just three percent down.

"Texas in general is a much better position than the rest of the country,” Ringstrom said.

Ringstrom says banks are only shying away from investment property loans.

"You have to have 20 percent down at this point because mortgage insurance companies no longer are backing investment properties. It makes sense because if you were going to default on a loan would you default on your primary residence or would you default on investment properties," Ringstrom said.

This is not a good time to sell, but if you're looking to buy you could end up with your dream home.

"I think we feel like it's going to be our home for a really long time and that's a good feeling," Montgomery said.

In January, the FHA will raise the required down payment on a loan by a half a percent to 3.5 percent.