FHA loan is a good choice.
1. They don't care much about credit. Bankruptcy which has discharged for 2 yrs can qualify.
2. You can put down as little as 3.5% for down payment
3. FHA Streamline will allow you to refinance after 6 months without credit check and no appraisal. FHA will refinance in the future at today's appraisal value regardless of the declining market. Thus even in declining area, prices dropped, still can refinance. The only requirement is that your original loan is FHA.
Don't know how bad your credit, please consult a mortgage agent to check your credit and options. If you need credit repair, Erica McClen (1st answer) has referred you a credit repair company which would help you too.
Good luck with your home searching.