No idea what the 1% your mention is.
Fha is 3.5% down payment, but you need 620 and depends on debt to income. I believe but does depend what lender you are using.
Your best option if you want to buy and take advantage of low housing prices is just buy with cash. There are some great handy man specials out there in the area you are looking for where you could buy the house for under 50k.