Unfortunately your not alone. Allot of people have had their credit ruined from family/friends promising to do good on payments.
Minimum FICO score for FHA is 620 so your not in that bad of shape. Yes paying off these loans will deff help your credit score. Best thing to do is not be afraid of getting pre-approved. You have to start somewhere and if things are worse you will have time to start NOW to get things started in motion. I have helped clients well over a year prior to them actually becoming homeowners.
I will be more than happy to assist you anyway possible. Feel free to give me a call or send me an email to: nick@nickruiz .com