My wife and I both have bad credit, I had bankrupt. in 2001 (discharged in 2002) And I have about $25k way over due in student loans. My credit score is about 580. My wife has a credit score of around 520, she only has credit cards that were late. How can we get a home with no money down?

Your best bet would be to try for a Hard Money or Equity Loan. But to do this you would have to find a property that is in default and has a cLTV (combined loan to value) of 70% or less - in other words, your Loan Amount would have to be 70% or less what the house appraises at. Even then your payments are going to be high as Hard Money comes with a higher Rate (usually 10 - 15% depending on the lender). Make sure it's financially feasible to do so before you buy the house. If you can't afford it, don't buy it. Period.

As far as the person that posted about the 80/20 Loan - these crap loans are exactly why so many people are in default and foreclosure. That is a 100% cLTV loan and is a very bad move to make in today's market. What that means is that you are taking a loan out for exactly what the house is worth. If the market continues to drop, you end up owing more on the house than you could sell it for. They are usually 5 year fixed loans, and after the loan matures (after 5 years) it goes adjustable and the payments go through the roof. Several of my clients are loosing their houses for this exact reason.

As a result, 80/20s are hard to find these days. Most lenders are requiring a credit score of 700 or higher to get them and even then it's iffy. Only 2 banks of the 457 banks I represent still offer this program. The highest the rest are going is a 80/10 or 80/15 and again that's with a 700 FICO (credit score).

[Hedwig]

If you're behind on credit cards and are behind $25K on student loans, with a recent bankruptcy, you have no business buying a house.

I know this sounds harsh, but it's part of the reason so many homes are in foreclosure right now. People were sold on the payments. Even if you could afford the payment, there is maintenance and upkeep, as well as utility payments, that you don't have when you're renting. When the furnance breaks, you don't call the landlord, you call the heating and AC service--and YOU pay.

In addition, you'll need things like curtains when you move in. There are always more expenses than you think there will be.

Rent a place--as small a one as you can squeak by with. Get a second job if possible, even if it's at McDonald's or 7-11. Concentrate on getting your debts in line. That will also help increase your credit scores. Save some money if possible.

In several years, when you have paid down your debts and saved a little money, you'll be better able to afford a house.