Alabama wasn't hit hard by the housing collapse, and prices are now rising. But it's still difficult to get a home loan there.
Alabama wasn't hit hard by the housing collapse, and prices are now rising. But it's still difficult to get a home loan there. - 
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Kai Ryssdal: There are some places that never saw much of a housing boom, so the bust wasn't so bad. And yet, the housing collapse still stings because now it's nearly impossible to get a loan.

Gigi Douban wraps it up for us from Birmingham, Ala.

Gigi Douban: Experts in the real estate industry here in Alabama say now's the time to buy: home prices are down and interest rates are very low. Thing is, there are plenty of folks who want to buy a house, but there aren't that many who can.

Woody Woodfin: We're seeing a lot more people that are not qualified today than we used to see in the past.

Woody Woodfin is branch manager for Mortgage of America, where he counsels and pre-qualifies people for loans.

Woodfin: Lot of foreclosures are on the market, lot of people have lost their homes due to various reasons, and those people are having a harder time qualifying.

Woodfin says it doesn't even take that much to hurt your credit. Young couples who don't have debt haven't built up a good credit score. People who've been out of a job for a few months are less likely to get approved. Even an unpaid hospital bill can destroy the chances of getting a loan. What's more, banks like BBVA Compass have scaled back their loan offerings. And the bank is rejecting more loan applications.

Jon Mulkin oversees mortgages for BBVA Compass.

Jon Mulkin: I would say that in the past we probably closed on average about 75 percent of the loan applications that we took. Today it's probably more in the range of 55 percent.

That 20 percent decline is partially due to new federal regulations that force banks to document everything. So the whole process takes longer. And now, Mulkin says, a lot of potential home buyers are getting frustrated.

But realtor Johnny Montgomery says clients who can afford it aren't dealing with loans at all.

Johnny Montgomery: I've just written four contracts in the last 48 hours, three of them were for cash.

So you don't have $200,000 in the bank? Not to worry. Montgomery says people here who have decent jobs and good credit can borrow money. They just might have to go through several lenders to get it.

In Birmingham, I'm Gigi Douban for Marketplace.