In a valley where the median price of a house is $665,000, it isn't easy for middle- or lower-income workers to break into the real estate market.

Mindful of the problem, government agencies and lenders sometimes will help with down-payment assistance or customized loan programs.

Still, buyers most likely will have to make sacrifices, such as starting with a condominium or a smaller, older house or duplex in a more affordable neighborhood.

When houses and condos are combined, the median price in Santa Clara County was $606,000 in March. That means half the homes sold for more than that amount, and half sold for less.

$1 million starter

With the median price so high, most first-time buyers can't afford a dream house in more expensive communities such as Palo Alto or Los Gatos, where starter cottages can sell for nearly $1 million or more.

``You're probably not going to buy a house,'' said Janet Houde, an independent real estate broker in San Jose. ``You're going to start with a condo or a townhouse.''

A search late last month of homes in Santa Clara County at www.mlslistings.com found 224 single-family houses and condominiums with at least two bedrooms for sale with asking prices of $500,000 or less.

By far, most of those properties were condos and townhouses. Only 33 single-family homes were listed in that price range, in communities such as East San Jose, South San Jose and Morgan Hill. On the other hand, two-bedroom condos ranging in price from under $300,000 to $500,000 can be found throughout the valley.

Of course, many buyers who work in Silicon Valley choose less expensive homes outside the Bay Area. But that approach comes with two trade-offs: Realtors say homes grow in value faster in the Bay Area than in the Central Valley. And workers who buy homes near their jobs avoid a more expensive and time-consuming commute.

Fortunately, there's help for buyers seeking to close the gap between their finances and Silicon Valley's high real estate costs. Government agencies, employers and lenders have teamed up to offer down-payment and closing-cost assistance, as well as mortgages that can cover 90 percent to 100 percent of the purchase price.

First-time buyers in the valley who meet income and purchase-price limits can take advantage of four types of assistance:

• Mortgages through agencies such as the California Housing Finance Agency, or CalHFA, which offers loans at below-market interest rates. Borrowers work directly with approved lenders, but the loans are backed by the agency.

``We take the risks away from the banks to help low- and moderate-income families and individuals purchase their first home,'' said Leah Pears, an outreach specialist with CalHFA (www.calhfa.ca.gov).

CalHFA-backed loans in Santa Clara County are available to one- or two-person households with incomes up to $122,168 a year, or households of three or more with incomes up to $140,493.

• Santa Clara County's mortgage-certificate-credit program allows borrowers to take a federal tax credit of 15 percent of their mortgage payments. The credit reduces the homeowner's federal tax bill directly, unlike the mortgage-interest deduction, which reduces the amount of income on which the homeowner pays taxes.

Information on the program can be found at http://oah.sccgov.org.

• Down-payment assistance. CalHFA, for example, offers a deferred loan of up to $25,000 for borrowers who need help with a down payment in high-cost areas such as Santa Clara County. The loan must be repaid when the home is sold, or when a homeowner refinances for a larger amount than the balance of the original mortgage.

Additional loan and down-payment assistance is available to teachers, and to buyers who purchase in targeted revitalization areas, such as downtown San Jose and communities in the city's Strong Neighborhoods Initiative.

Neighborhood Housing Services Silicon Valley (www. nhssv.org) also offers first mortgages, home-buyer education and down-payment help to first-time buyers.

• Closing-cost assistance. The Housing Trust of Santa Clara County (www.housingtrustscc .org) has offered a deferred loan of up to $6,500 that can be used for closing costs. The loan must be repaid when the home is sold or when a borrower refinances.

This program is currently suspended, but it's expected to resume in the summer, said program manager Jonathan Smith.

The Housing Trust is funded by contributions from government, employers, foundations and individuals.

Assistance programs require varying qualifications, but mortgage lenders say they're eager to help first-time buyers navigate through the process.

``It's our job to be the subject-matter experts on this,'' said Arlene Allert, vice president and Bay Area regional manager of Wells Fargo Home Mortgage.

Credit score

Lenders, of course, want to make sure that borrowers are able to repay their mortgages and favor buyers with stable jobs and a good record of paying their bills. Realtors and bankers advise would-be buyers to examine their credit history and learn their credit score.

``The better your credit score, the more willing a lender is to take you on as a risk,'' Houde said.

Borrowers who don't have good credit would have to pay a higher interest rate, which would result in higher payments. And that, ultimately, would make it harder to qualify for a loan.

``Don't assume you know all the answers,'' Houde said. ``Have someone who knows what they're doing analyze the situation.''

Individuals with good credit -- a score of about 620 and higher -- and a stable job history may find they qualify for a larger loan than they might have thought.

``We will look at the overall qualifications,'' said Nannarie Chaikumnerd, a senior loan consultant for Washington Mutual's San Jose home-loan center.

Lenders traditionally limited borrowers' housing costs to 28 percent of their incomes, and total debt payments to 36 percent. In California's high-cost housing markets, however, lenders have stretched their limits for a borrower's total debt load.

For a well-qualified borrower, Chaikumnerd said, ``45 percent is very doable.''