It's time to welcome the king of financing back to it's throne:  FHA.  With the demise of the subprime market, FHA is again the financing choice for first tiime homebuyers.  FHA stands for Federal Housing Administration and is under the umbrella of the U.S. Department of Housing and Urban Development.  FHA has been around since 1934 and guarantees the loan if the borrower defaults. 

Why FHA?  Homeowners need only 3% of the sales price for their down payment and can ask for the seller's to pay their closing costs.  FHA also offers Rehab Loans also known as 203(k) loans, which allows you to finance the cost of repairs into your loan.