If you are in the market for a new home, I recommend looking at buying an REO property.  This is where some of the great deals are today.  REO stands for Real Estate Owned -- and it is an industry term that means "The Bank Owns This House".  This means that when you buy this property,  you buy it from the bank, not another owner or builder.

Can you get an FHA loan for these?

Yes.

As long as the property passes an FHA inspection AND is under the FHA loan limits.

Can you use a Down Payment Assistance Program to buy these?

Yes.

As long as you can get the bank that you are buying them from to agree to it.

Here are some of the largest REO Property Search Sites:

Bank of America
Chase
CitiMortgage
Compass Bank
CountryWide
HSBC
Indymac Bank
Ocwen Financial Corporation
Omni National Bank
VirtualBank