FHA Home Loan could be the right loan program for you. FHA is a government loan which has been around for several years.
FHA requires just 3.5% down-payment. Which means it will finance 96.5% for your home loan. FHA will have a 1.75% up-front MI (Mortgage Insurance) which can also be financed to your loan. This would total your loan to be 98.25%. Regardless of how much you put down on your home loan you will still be charged a monthly MI.
Credit is usually easier for FHA loans, even if you have a lower credit score it will not effect the rate as much.
Don’t automatically assume that you can not be approved for a FHA loan. It may meet FHA requirements depending on your circumstance. You possibly may have options that can improve your poor credit scores within time. Some home buyers may need to spend six months to a year improving credit history.
Your first step should be going to your lender and seeing if you can first be pre-qualified, if not they can take a look at your credit and determine if there are solutions to improve your credit scores. Contact FHA credit counseling or first-time homebuyer counseling.