I would maybe check with your broker to see if there are any state specific programs. I live in Utah, and there are programs through the Utah Housing Corporation that have more relaxed terms. My husband and I just got our final approval from the underwriter and should be closing soon. The program we used required no down payment. It is an FHA loan and the 3.5% down is financed into a second mortgage through the state. This does mean that are payment is about $25 higher than it would normally be, but we can live with that. We are also getting seller paid closing costs so all in all after everything we are paying just over $1k out of pocket to get into our house. We also only have a few grand in savings. We do have a few other assets, like cars that are paid off and 401ks, but we don't have a lot of reserves. After our mortgage our DTI is about 37%, which our LO said was pretty low and I think that helped out. We were really expecting to have to rent for another year while we finished saving up the money, but were very pleasantly suprised to be able to find a way to buy right now, since housing prices in our area are going up.
States want people buying houses, more houses = more property taxes, and on top of that more jobs. So you never know, there may be something that you can do to get around needed all of the money upfront.
