What I would suggest is locate several loan companies near where you want to live or are living now. Please don't use online mortgage companies, this is too important, you want to talk to someone face to face so that you know they understand your financial situation. As for your bad credit, they are the professional, not these folks here at Yahoo. An FHA loan may be the right thing for you, then maybe not. If you have never owned before, ask about first time buyers money. That can help you with things like downpayment or closing costs. So start with a loan company, have them pre qualify you. That way you know what you can afford. The by looking at open houses in the areas you like, talk with the agents and when you find someone you're comfortable with, ask them to help you find your home. Working with an agent does not cost you anything and they do all the leg work, plus drive you around in a pretty nice vehicle most times! lol

Your bad credit or low credit score will impact you, there's no doubt about it, but maybe not to the extent that you think. You are on the right track as far as understanding that renting get's you no where and owning does.

P.S. Just don't let a loan officer talk you into anything but a fixed rate loan. Save yourself a lot headaches down the road.
Good Luck! And thanks for being in the market!