Both answers above are very good. One last option is to look for an Owner Finance house. Many sellers are selling on Contract for Deed or Note & Mortgage and will finance some or most of the note while you clean up your credit. This even qualifies for the 1st Time Home Buyer Tax Credit!

The most important thing is to stop doing what you have been doing that got you to such a low score. You need to first change your spending habits and then secondly get on a plan that you can follow that will get your scores up while saving money for a down payment.

Best of luck.

Abby,
Ryan is correct. There are lenders out there that will help you get qualified. Also, another alternative is to lease/purchase from the landlord. They too, may work with you on a little higher amount than a regular rental, but the extra goes into a down payment or other financial avenues determined by you, the buyer, and the landlord,seller negotiate. Also, perhaps working on a lease/purchase would allow you time to boost your score so then you could finance, a few years down the road and show you have already been making payments for "X" amount of time on the home you know want to apply for a mortgage on... my website has some intersting search calculators, so feel free to try them out, too. The key is do not give up hope.

Good luck.

Abby, even in this time of fought credit guidelines, all hope is not lost. What you need is a lender who's willing to take the time to sit down with you and counsel you both on what steps you'll have to take to get qualified. I have several reputable such lenders I'll be happy to connect you with, if you wish.