With the federal government now backing 90% of all mortgages, home loans have become very affordable and available.

The average cost of a 30-year, fixed-rate loan -- the most popular way to finance a home -- fell to 5.92% in our most recent weekly survey of major lenders taken Dec. 3.

Although that's almost four-tenths of a point more than those loans cost in January, when they fell to a four-year low of 5.57%, it's three-quarters of a point less than we were paying in July.

Our extensive database of the best mortgage rates shows many lenders offering borrowers with good credit 30-year, fixed-rate loans for as little as 5.375% with fees of $1,000 or less.

Anytime you can get a mortgage for less than 6.5%, you're getting a good deal. So these fall into the category of great deals.

You might not expect reasonable rates with the nation's banks and mortgage companies reeling from the record number of defaults on the deceptive, unaffordable loans they made a couple of years ago.

But the nationalization of the mortgage market has kept the money flowing despite the banking crisis, stock market slump and probable beginning of a serious recession.

The whole point of the Bush administration's takeover of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corp. (Freddie Mac) on Sept. 7 was to ensure mortgages remained affordable and widely available.

The two companies buy about 70% of the home loans made by banks and mortgage companies in this country. They keep some of that debt and sell the rest to big investors, including mutual funds and foreign governments.

As the mortgage crisis worsened, creating a record number of foreclosures, Fannie and Freddie began losing money, making investors reluctant to buy mortgages from them.

Now that the government is in charge, investors are providing enough money to keep the money flowing and rates reasonable.

Last month's decision by the Federal Reserve to buy $600 billion in mortgages financed through Fannie Mae and Freddie Mac will should generate even more money for new loans.

That's why the average rate for 30-year fixed-rate loans fell nearly four-tenths of a point right after the announcement.

Another 20% of all mortgages are being guaranteed by the Federal Housing Administration. FHA loans were created 74 years ago to help first-time buyers, especially low-to-moderate-income families and minorities, get financing they could afford.

That means only 10% of all home loans are being made without the government's help -- and those mortgages are expensive and difficult to obtain.

Most unguaranteed money is being used for jumbo loans -- mortgages for more than $417,000 to $729,750, depending on the city -- that are too big to qualify for government backing.

Jumbo rates have stubbornly remained above 7% since the mortgage crisis began, and the average jumbo loan cost 7.46% in our latest weekly survey.

The fact that Fannie Mae and Freddie Mac will stand behind your loan doesn't mean lenders will be less demanding when they review your mortgage application.

We'll continue to see a return to sane underwriting practices -- something that was sorely lacking during the housing boom of the early 2000s and that led directly to the problems we're enduring today.

In short, you must:

Have a reasonable credit score. Anything above 700 should work. Here's where to find out what goes into your credit score and how to get your credit score.

Earn enough money to repay the loan. Here's where to learn about the two affordability tests most lenders use.

Be able to fully document your income, assets and debts. Here's where to find out about questions you'll be asked on a mortgage application and all the paperwork you'll need.

Make a reasonable down payment. 100% financing is a thing of the past. You'll need at least 3% and perhaps as much as 25%. Here's our most recent look at how much you'll need for a down payment.

All of that may seem pretty basic. But we're seeing a record number of foreclosures, because a few years ago banks and mortgage companies went on an unprincipled lending binge.

They made a ridiculous number of loans that couldn't possibly be repaid, often to borrowers with bad credit and no down payment, and based on inaccurate information the lenders never tried to confirm.

In the late '90s, subprime loans made to borrowers with bad credit accounted for just a small percentage of all mortgages.

That exploded to more than 20% in the early 2000s as lenders pushed deceptive, costly adjustable-rate loans, such as 2/28 and 3/27 mortgages, on millions of borrowers.

Now, almost no one is offering them. Subprime loans are back to accounting for about 3% of all mortgages, and anyone with a credit score below 620 is going to have a difficult, if not impossible, time financing a home.

Your best bets:

FHA loans. Getting the government to guarantee repayment if you default allows banks to extend credit to borrowers they might otherwise turn down.

Hope for Homeowners. This is a federal government foreclosure prevention program intended to help homeowners with unaffordable mortgages refinance into more affordable FHA loans, regardless of their credit.

By Mike Sante

Interest.com Managing Editor

Have a question about your finances? Ask us at editors@interest.com.