Zero out of pocket is still feasible.
Ask your friends/family/coworkers for a referral to a great loan officer and see if you can qualify.
A good % of the time, that lender will be able to work with the realtor to structure your contract with down payment and closing costs paid by seller.

With all the loan news and lending changes lately, many people think that they cannot possibly qualify for, or afford to buy a house, townhouse, or condo. On the contrary, some new lending packages may make it easier than you might think to actually own your own American Dream! Never before have we had lower real estate prices at the same time as low interest rates -- an unbeatable combination!

If you or your friends or family might be interested in this, reserve your seat at an educational workshop on:

WEDNESDAY JULY 30
7:00 PM
Call 408 861-2447 to reserve your spot

- Special purchase progranms are available only through December 2008
- Very low down payments required
- Some assistance may be available for down payment
- Easier credit score qualifications

VA or Rural Development loans are no money down

Simply put, yes.
The best way is to do an FHA loan with a 3% seller paid down payment. It is a very simple program and you do not have to qualify for it. As long as the seller agrees to it, you are fine - and your loan has to be under the FHA county limit.

You can also have the seller pay your closing costs as well, getting you into the home for nothing out of pocket.

Please call me if you have any questions about it.
Luke Allison
Flagstar Bank
828-777-8828

Lending answer:

There are three 100% mortgage products available to banks and lenders:
1.) FreddieMac Home Possible 100 - Income and/or geographic restrictions apply
2.) Veteran's Administratin VA - must be eligible veteran
3.) USDA RDA - Geographic restrictions apply.

You'll need to interview banks and lenders to see if they offer Freddies' HP100 or to see if you qualify for a RDA loan through the US Dept. of Agriculture.

Additionally, as Bill mentions below, there are state and local grants and loan programs not available in other states.

The answer is yes. You need to make sure you are working with a knowledgeble Mortgage/Real Estate Broker who can advise you how this can be done using the new improved FHA Insured loans. Also, If you have not owned a home during the last 3 years you get you 1st time buyer status back. This opens up another group of loans which are a mix of State and local programs which vary from with Cities and Counties.