I know this is a rare situation, and I have read before on other forums that some people are having luck - particularly with USDA. Here is our story (and I apologize, if it sounds like a broken record because I have asked this question on other forums). We filed bk7 in 2005 before the laws changed, and we were discharged in Feb. 2006. We had two houses - our primary and a rental. The rental was immediately foreclosed on. The primary residence had two loans - a first and second mortgage. The second mortgage reaffirmed, but the first refused. They did not foreclose because of the second and they agreed to let us stay as long as we made payments. A few years after that, we settled for less than we owed with the second. Then, about two years ago, we hit a temporary rough patch (dh's hours were cut for two months) and when we asked the first mortgage company for help, they suggested not to make the payments for two months so we could qualify for HAMP. We did this, but they immediately filed for foreclosure. We responded to the court documents, and the judge threw out the foreclosure because the bank did not respond. This happened a couple of times. We spoke to a few people at the USDA, and they determined that we could qualify for a new loan because our bk7 was almost 6 years+ old, and since we were just in pre-foreclosure, they would only look at the length of time for the bk7. The loan would only be in dh's name since my credit is not good right now and I don't have a job. They even found a lender who had no overlays, and an investor who was willing to buy the loan even with our complications. Dh's midscore was around 650. We got a preapproval, but couldn't find an appropriate property. We renewed our preapproval a couple of times over 7 months, and then our lender said the USDA laws had changed and we were required to have the primary residence out of dh's name. So, we had a quit claim filed, and then they said our state had dower/curtsey rights, so we revised the quit claim to include those. The USDA office said it would accept that, but the lender's underwriter felt it was not sufficient. Then, the lender's underwriter felt we needed to have more cash reserves - at least 6 months worth. These were not requirements they had for us the first couple of preapprovals, but were new. USDA doesn't require cash reserves. So, the next step was that the lender sends us a letter saying we are denied, and he calls us and says there is nothing more they can do for us. Supposedly, up until that point, we had a preapproval through GUS, but the lender never sent anything to USDA - he didn't even have his underwriters look at us until after a couple of preapprovals. The whole time we were trying to find a house, he kept telling us there wouldn't be a problem. Then when we found a house, he tells us he can't help us. We are so frustrated, and the house we are trying to buy is going to be listed on the market this week.
I'm just wondering if there is any hope. Has anyone out there been living in a house that was IIB and still got a USDA guaranteed loan?? If so, can you tell me your story? I'm waiting to hear back from someone at the USDA office in Washington, and several other lenders, but it's so frustrating knowing we finally found a house and might lose it because of the lender changing their mind. 
