Nope, I didn’t stutter. You still CAN buy a home in San Francisco with just 3.5% down.
There are lots of restrictions, certain buildings don’t qualify, interest rates are slightly higher, but honestly, for many people, it is THE ONLY WAY that they’ll ever be able to buy a home.
FHA loans work for single family homes, and certain condos.
Single family homes that are habitable are a no brainer in terms of an FHA loan.
Some older condo buildings are on FHA’s approved list. Other units can qualify for an FHA loan with “SPOT” approval (a post for another day).
But until recently, buyers who wanted a low down payment on a condo in a new development had few options.
The nice thing is that NOW, many of the new developments in San Francisco have gone out of their way to get themselves FHA approved, which means that you can plop your 3.5% down payment right down on a shiny new condo. 
Some of the developments that are FHA approved and offering 3.5% down (or in some cases higher):
- SoMa Grand
- Esprit Park (currently 10% down, but 3.5% is around the corner)
- The Montgomery
- Blu
- Arterra (last I heard it was 10% down, but may already be 3.5%)
- Candlestick Point – The Cove
I’ll update this list as I get more confirmations.
AND rumor has it that legislation IS coming down the line that will give ALL of these new developments the opportunity to take your 3.5% and shove it )(right in to a shiny new condo, that is!) 
Stay tuned for more FHA updates.
Luba, you may want to double-check this. New tighter FHA qualifications kicked in on October 1 and I suspect many of these developments no longer qualify.
By the way, your new headshot photo is wickedly cute!
Thanks for the tip – I did check with the develepments, but they may not even know about the changes themselves yet – though one told me that they were all going to be 3.5% eligible in the next month or two.
And thanks for the compliment! Now I just need to figure out where the hell the OLD headshot lives to destroy it – since it pops up next to ALL my comments on every blog everywhere. The internet is just TOO big!