My husband and I have been through the ringer in our journey to homeownership and at this point are so emotionally drained we can't even think straight...so I figured it might be best to look for some other opinions about our situation 
The story is crazy complicated, so I will try my best to summarize it as succintly as possible:
- In August of 2014 we began the process of building our dream home (final price of $452k) along with an agressive debt reduction plan to pay off all of our debt by the time construction was completed (May 2015) to get our scores/DTI into an acceptable range. It was quickly determined that with my income being solely from self employment and the business showing a huge loss in 2013 that it would be best to remove me from the application so as to not eat into my husband's income...he was preapproved by the builder's lender for a conventional mortgage, contingent upon completion of the debt reduction plan with 5% down.
- Over the course of the construction we stayed in continuous contact with the lender to ensure he was staying on track with the plan and everything would be in order by the time for closing, complete with multiple credit checks every few months. Everything was going according to plan and his middle score was 683 as of May, far exceeding their goal score for him of 660 laid out in the plan. Through the process of paying down all of our debts, including some mutual accounts, my score was boosted as well and is now higher than his even.
- Our closing date was scheduled for May 29th, we gave 30 days notice on our rental with plans to move in June...at which time the landlord informed us that he was wanting to sell the house after we moved out anyways.
- Last week the LO calls to ask some questions about the previous mortgage my husband has on his credit and what was the final disposition of the property. We informed her that obviously it had foreclosed and she immediately said we were going to be denied because it hadn't been 7 years from the FC date yet and according to her we can't even qualify for FHA for another 3 1/2 years (See related thread New mortgage approval with 5 year difference between BK and FC). All of our hopes and dreams for homeownership were dashed in a matter of 5 minutes, and then the panic started to set in.
- We inform our landlord that our financing has fallen through on our new home, and he tells us that he is still going to sell the house so we need to be out by June unless we want to buy the house from him (estimated value of house is $320k, within the $326k FHA limit for our area), which we aren't even sure if we can at this point according to what this LO is telling us.
- When contacted our realtor and let her know what has happened, she suggested that we look for a seller willing to do a lease-to-buy arrangement where we would pay not only a monthly rent but also give a down payment up front and a set amount each month to add to the eventual total down payment with the plan to purchase in a year or two. She has one potential seller willing to do such an arrangement, but the house isn't exactly what we were looking for and the price is a little high for what we would be getting...
- Yesterday we spoke with a different LO who told us that the BK date trumps the FC date, so she thinks there is a chance she can get us an approval...but whether that will be FHA or conventional we don't know and we are skeptical to even believe we can be approved for anything at this point
Here is where the dilemma comes in - What would you do?
A. (IF we are able to qualify for FHA right now) Purchase the house we are renting now, which isn't exactly our dream house - unfortunately we don't have the time to shop for another house as the landlord wants us out by next month
B. Look for another rental and just wait out the supposed waiting period to purchase another home, whenever that may be and end up having to move twice
C. Take the lease-to-buy offer and ultimately purchase another house we aren't completely happy with
D. (And this is a controversial one I know) Get a divorce on paper so that I could qualify for a mortgage myself in a year's time with the generous child support & alimony from my husband, which another LO we spoke said she has actually seen done before (obviously an extreme last resort) so that we could purchase another dream home. This option would still require us to find somewhere else to live in the meantime
If anyone can think of any better choices than the ones I have listed, I'm all ears! Our situation is getting pretty desperate, and as you can see we are in quite the pickle and none of the options are ideal. Our hope right now is that somehow this new LO might be able to get my husband approved right now for a conventional and we could still purchase our dream house, which is starting to feel more and more impossible with each passing day (and it doesn't help that all of this has coincided with a holiday weekend lol).
We are still technically under contract for the new construction house, as we haven't signed the cancellation of contract yet (likely will have to this week if we don't secure some kind of financing for it though) but the price is $128k over the FHA limit for our area and since we can't carry a second and they won't do a carryback for the difference I don't think FHA will work...and we only have $20k for the down payment right now (5%) and could come up with more in a few months' time if we weren't being put under the gun by our landlord to move next month. :/ We need either more TIME or more MONEY, which unfortunately the luxury of neither available to us right now 