Need advice on how to proceed with deal. HUD 203k help??

[Steven Tankersley]

Hello all,
Im 22, and graduating from Sacramento State Univ next year with my degree in Construction Managment. I already have my career started with CC Myers Inc as a project engineer, however I wont be making my full salary (70k year) until I graduate in 2008.

Heres the deal- The house I live in now my parents purchased as an investment which I "flipped", and did all the work myself.. complete remodel. As you all well know, the market has taken a turn, and Sacramento has taken a big hit.. I see an opportunity to start home ownership, however I am on my own financially. A 1500 sq ft, 3 br house down the street from me went on the market last week at 219k asking- great structural shape, great neighborhood, but very rough around the edges.. easily a 310k dollar house in good condition. I see a great opportunity for me to purchase the house, get it in livable condition, rent it to fellow college students until I graduate in 2008. By the time the market begins to level out, remodel, and hopefully sell for a profit, or hold for rental income.

My dillemma is that I am financially limited. I currently have a steady career, however I am only making roughly 30k a year since I am part time while I am in school. I can get the 5% down to purchase the home, but Im worried about getting the loan. I have excellent credit (above a 700), and I plan on renting it to make the mortgage ( 1200-1400 month). I was about to give up on the idea of home ownership until I came across FHA/HUDs 203k assistance program. From what I gathered, its for first time buyers who want to buy a house that needs rehab. They basically insure the borrower so that a lender will be comfortable lending 110% of the finished homes value. Sounds great, but also sounds like a lengthy process. Any experience with this???

Basically, Im trying to find out how I can make this deal work on my own- if at all possible. Risk is OK with me, I have a level head on my shoulders, and I realize that risk comes with the game. This house already has 3 offers on the table, and I am confused on how to proceed.
Thanks
-Steve