Short answer: Yes. They are designed to work together. Most first home buyers use both.
Yes. This is exactly what most people do. You use your KiwiSaver for part of the deposit, the First Home Grant for more, and the First Home Loan to cover the rest. It is designed to work as a package. You do not have to choose one or the other.
Kiwi Saver Balance: $25,000
First Home Grant: $5,000
Total Deposit: $30,000
House Price: $600,000
First Home Loan Covers: $570,000 (95%)