One thing is certain-these rates are exceptional right now. Locking the rate in now for the long haul is smart, both from a borrowing and investment standpoint... if you think you will be in the area for some time. Great time to buy Iowa City Real Estate...or property in other college towns with like demographics.
As far as loan with 5% down go, your credit scores need to be higher to get those in most instances. Even with an FHA loan with 3.5% down, it is harder to get if your score is below 620, and sometimes there aren't as many choices with a score between 620 & 660. You may want to see if there is something you can do to increase your scores.
There are programs which offer down payment help for first time buyers. The min credit score is usually around 640.
Contact HUD at 202-708-1112 or visit HUD.GOV
They can provide resources for first time buyers and buyer education materials.
Best of luck to you,
Kawain Payne, Realtor