Raleigh, N.C. — The down economy has made it a good time to buy a house, but economic fears keep many from taking the plunge.

Federal, state and local authorities are offering loans and tax credits to help allay those fears and get the home market moving again.

"There is a misconception that lenders don't have money to lend, and that is not reality," said Sharon Drewyor, director of home-ownership lending for the North Carolina Housing Finance Agency.

"Having been in the industry for 26 years, what better time to buy?" she asked.

Will Hartye bought his first home in August. He took advantage of a program that Raleigh offers to first-time home buyers looking in revitalization areas.

"I still don't think it's sunk in quite yet," Hartye said of being a homebuyer.

Federal and state governments have made their own offers to sweeten the deal even more for first-time buyers.

Through July, the federal government has authorized a $7,500 housing credit – but it acts more as a zero-percent loan than a tax credit. You get the lump sum when you file your taxes, but have to repay it at $500 a year for 15 years.

On Thursday, Gov. Bev Perdue approved a measure that might help first-time home buyers even more – the Mortgage Certificate Credit, an annual credit of up to $2,000.

"This is actually a true tax credit. It's not a loan," Drewyor said.

The MCC allows home buyers to take a tax credit of 20 percent of interest paid on their mortgage – up to $2,000 – each year. Buyers can adjust the exemptions listed on the W-4 they file with their employer, and less money will be withheld from their paycheck.

"You would see that additional income in your paycheck every month before you make that housing payment," Drewyor said.

Take a typical case: You take out a mortgage of $180,000 with a 5.5 percent fixed interest rate. During the first year, you would probably pay roughly $10,000 in interest on the loan.

Take away $2,000 of that interest and put an equal amount back into your wallet monthly: That's an extra $166 a month.

State government officials said they are excited about the potential of this tax credit to help jump-start the housing market and, more broadly, the economy.

"The MCC will help stimulate the housing market, which in integral to the recovery of our state's economy," Perdue said. "This is just the type of innovation from a state government agency that will help spur our economic recovery."

"With tax credits like this, it's a perfect time for first-time home buyers to enter the market," Drewyor said.

For information on the MCC, other tax credits and participating lenders, visit The N.C. Housing Finance Agency's Web site or call the agency at 919-877-5700 or toll-free at 800-393-0988.