This is what we did to get an FHA loan through National City for the house we purchased in January. It was kind of confusing but basically, instead of the sellers taking our offer on the house, we paid the full asking price but the sellers then paid a 3% gift to us by using the Nehemiah Program (which was used as our down payment) as well as the closing costs. In the end, it came out to about the same amount as if they had simply taken our original offer but this way it worked out because we didn't have to pay a large amount down up front.

Just because I couldn't pay $10k up front for a down payment doesn't mean I can't afford to make my monthly mortgage payment without a problem.