I don't know if they have this in your state, but in LA they have a First Time Home-buyer program. You attend like 4 classes and they give you gov't money to pay most of your closing costs. You have to make under a certain amout of money to qualify. I did that when I bought my house (using only my income and the house is only in my name) and we only had to come up with around $800 out of our own pocket. Ask your real estate agent if there are any programs like that in your state you could check out. Free $$$ is good!
Oh yeah -- there are a TON of those types of programs out there. Also, the US Dept of Rural Housing has special incentives for lower income (which we all know military qualifies for) to purchase housing. Your best bet would be to find a broker in your area ... they can shop for the best loan programs for your situation and you'd be surprised what they find. Incidentally, we have to pay $37 out of pocket of that $4000 in closing costs. Very often, the buyer will pay the costs as opposed to haggling over the price. So it's very doable! As a matter of fact, that was the ONLY way we could buy a house right now!
I forget what the exact rules are ... there's a link in another topic to the VA site. Anyway, it depends on the cirucumstances, but sometimes VA will approve another loan. It all depends on whether they got their money back out of it, etc.
Also, after so many years without owning property, you are considered a first time homebuyer again. Call a mortgage broker ... that's your best bet.
And if you can't get the seller to pay some or all closing costs, shop around for a lender. There are some that charge outrageous costs and some that charge next to nothing. Shop around for an attorney as well.
If you decide to go through with buying a house, good luck!!