Likelihood of obtaining an FHA loan?

[KateS]

Hi everyone. We are considering buying our first home as we have recently started a family. When we looked at my credit a year ago it was in the 580 range. Since then I has come up and I am wondering if we are in a good position to do this now or if there are more steps we need to take before potentially being approved for an FHA loan?. 

1. Credit.  - FICO -> Experian 615 Eq 644 TU 648   - There are serveral charge offs, delinquent paments, etc from many years ago that I was an authorized user on with an ex. I just put in a dispute to have  these taken off but now am nervous after reading some articles that removing them may ding me some points. If those are taken off, my credit history will show going back to 2000 for an auto loan. I had many delinquent payments on my student loan in the early 2000s but have paid on time for the past year+ however in February they put into forbearance/deferred and is showing as such. I didn't request this and didn't realize it until pulling my redit yesterday and I am still planning on paying it. Will that status disqualify me? I do have a judgement from a collection agency from 2003 but none of the FICO reports are showing it, but Credit Karma is showing it. 
2. Income.- We will only be using my credit and I make about 50k a year 
3. Source of income.  Full time work- Mostly hourly pay with some part time side income and some overtime
4. Monthly debt payments.  Student Loan is about 250 monthly. I have no other lines of credit because I erroneously thought that being debt free would put me in a better position to buy a home. 
5. Assets/Reserves.  No real assets but can have 5-6% down and maybe a little more. 
6. Location.  St. Louis City, Missouri 
7. Property.  Single Family Home
8. Value.  Max 130k but really this is a starter home and my wife is starting a business so we want to keep our expenses low for the next several years. There are plenty of homes in the area for 100k-115k that would suit our needs. I have read that this low number could be a problem?
9. Occupancy.  Primary residence
10. Transaction Type.  Purchase

[ShanetheMortgageMan]

If the delinquent marks on credit are from "many years ago" and you've had at least 12 months of re-established on time credit since, then they shouldn't stop you from getting a mortgage.  Student loan forbearance/deferment isn't an issue, but it sounds like the student loans are still owing so the exact status (deferment?  forbearance?  they aren't the same) will need to be known.  If it's in deferment & if they will be deferred for at least 12 months from closing on the mortgage then the payment can be excluded from your debt ratio (for FHA & VA financing).  If they are in forbearance then a payment would be included on them either way.

Even though the judgment no longer reports to credit (and it shouldn't, since it's over 10 years old) be aware of the statute of limitations, as the title company does a public records search so if it is still owing then they may find it.  Plus you also have to answer a question on the loan application that asks if you have any outstanding judgments, so best is if you check to see if it's still owing.

Part-time employment needs 2 years at the same employer to count, overtime income needs a 2 year history to count.

$50k/year of income & $250/mo student loan payment will be fine to qualify for a $130k sales price.  If you aren't planning on putting much down then FHA would likely be your best option.   Missouri offers a down payment/closing costs assistance program for first time homebuyers too:  https://mhdc.com/homes/firstplaceloans/index.htm

Sales price isn't a problem.  When you start getting into the $50k range then you'll find lenders start shying away.