I work for a mortgage bank and I see your situation all the time. I think your main focus should be whether down payment assistance programs will continue. When the President signs the housing bill, it should do away with DPA programs but the question will be when do they go into effect. Assuming that you can get a 3% down payment (it can be a gift from family still) then the next question will be "How do you get approved?"
Let me tell you that due to the influx of FHA files in the last year, many banks have established a minimum credit score requirement for FHA loans. This is not an FHA requirement but a bank-by-bank policy. Most banks raised the number to 580 or more. Which means right off the bat, you have a slim number of banks to even apply for an FHA loan at. I work for Flagstar Bank and because we have always had a strong portfolio of FHA files, we still do not have a credit score requirement for FHA files, meaning that your application has a home with us. After that, when taking the application, the main thing would be to get some letters of explanation as to your lates, collections, etc on your credit. If there are good compensating factors and you can possibly provide a 12 month payment history for "alternative" credit items like rent checks, utilities, auto ins, cell phones, etc. then you have shorn up your file and made you look stronger than another similar applicant who produced no such documentation.
I know that most standard advice will be to simply continue on the path of building up your credit, which is very good and very true. However, you simply never know if you could get approved right now and if you could, what's the harm?
I can't make you any promises but I would welcome the chance to speak to you, review your situation and give you the tools you need plus the knowledge of what an underwriter is looking for when they get you application. You can call me anytime today and I promise you no gimmicks, sales pitches, mandatory credit pulls, etc.