Question about first time loan for a first time homeowner.

[Lyman DeAnn-Gaines II]

Hello everyone, I'm your typical newby slowly getting overwhelmed after finding more and more options. I live in the Chicago area, and for my first property I would rather not move out of the city. As I expected, many properties are out of my grasp unless I save up for a couple years for the down payment. Of course, this brought me to research the FHA loans for potentially paying 3.5% down. From this, stems the questions I am currently sitting on.

With finished houses nearly 250k+ around my area,  I have seen many "gutted" houses for half the price most being around 140k.

As a first time buyer, would it be suicide to attempt a project like a gutted house?

I've recently heard about 203k FHA loans that include the costs for rehabbing into the loan....

From the description I read,  does the 3.5% down from the full loan,  or just the house value?

Of course I have a plethora of questions I can ask,  but I am still trying to learn and can't have people g ALL of the answers.