theres things available you dont need a down payment. HUD still has $100 down programs. i got my house thru HUD, and it was in pretty decent condition. needed a little work, but not MAJOR stuff. i could have built in the costs into my loan, but my realtor didnt submit the offer correctly, and instead of waiting another day or two to resubmit it, i opted to close that day...i had to take about 2600 into escrow, but i got all my stuff fixed, and instead of it being built into the loan, it saved me about $16/mo
as for the credit, its available until 12/1/09, so youve got 4-5 months to get into a place. its 10% of the purchase price, up to 8k max, unless you and your wife make an ungodly amount of money you get phased out, but judging by your statements, that doesnt seem to be the case right now
if he hasnt bought a home in 3 years, doesnt buy it from family, and a couple other stipulations, its 10%. so unless he buys something for 40k, he will get the full 10% up to 8k max. i bought my house for 78000, and i got back $7,859.20 two weeks ago (they paid me intrest for the 3 months. LOL!)