To make a long story short- I own a house that I purchased jointly with my previous husband. I have a relative that just moved to my city and is staying with family, but needs a place. My new husband has never owned a home before- his name isn't on my mortgage for my house, nor is he on the deed. We have decided that we want to go ahead and purchase another house, and we're going to let my family member rent my current house. I'm in the process of researching options, checking credit reports, yadayada. We think that we want to try to have him qualify for a VA loan on his own- midscore is 650, he makes about 70k/yr and only has 2 cc and a car payment. I make about 65k/yr, but I have a significant amount of debt now that my student loans are out of deferrment, along w/ several cc, a personal loan, and car payment, and current mortgage (I think I was at about 47% DTI when I tried to figure it up but it has probably changed some because I'm paying off CC now- 3 down, and 3 to go). We figure it wouldn't be helpful to add my income because then my debt will also be included (although he is paying rent for an apt near his job so I know we can manage 2 house payments/month).
Question is, will he qualify as a 1st time buyer and be able to ask for the reduced credit (I believe the IRS said it was cut in half if you file "married, filing single" ). I owned the house prior to us getting married so he has no claim to it (we're in Ga so it's not a community property state, from what I've read), he has no financial obligation on the mortgage, and he's not on the deed. What's confusing me more is that FHA defines a 1st time homebuyer as:
-An individual who has had no ownership in a principal residence during the 3-year period ending on the date of purchase of the property. This includes a spouse (if either meets the above test, they are considered first-time homebuyers).
-A single parent who has only owned with a former spouse while married.
but the IRS says the credit limitations are defined as: Taxpayers (including spouse, if married) who owned a principal residence at any time during the three years prior to the date of purchase are not eligible for the credit. This means that you can qualify for the credit if you (and your spouse, if married) have not owned a home in the three years prior to a purchase. If you make an eligible purchase in 2008, you claim the first-time homebuyer credit on your 2008 tax return. For an eligible purchase in 2009, you can choose to claim the credit on either your 2008 or 2009 income tax return
The information between the two agencies is kind of conflicting, and the IRS doesn't really provide any helpful clarification- it seems cut and dry, but I would think that it would make some definition on if a residence was already owned prior to marriage, etc.
Any clarification or advice on best way to proceed would be helpful before we start wasting time.
Starting Score: EQ 605 TU 613 EX 600 