FHA loans are indeed a totally different type of loan, you would need 3.5% down to qualify, approvals for FHA loans arent so much driven by the location of the home, so much as the condition of the home. Also, only certain condos qualify for FHA loans.
I highly suggest you talk to a local loan officer in your area to find out which loan may best suit your needs.
Dave Lowe, Real Estate Broker
Knowledge, Experience, Family Values