It is understandable why you want to lower your monthly payments. With less than $2,000 a month coming in, it would be hard to make $1,500 mortgage payments.
Downsizing does sound like the right approach.
If you use the available income as suggested by the captain and multiple that monthly amount by 100, you will get a rough estimate of the loan amount you can take out on the purchase of a smaller home. You should add in about $45,000 net from the sale of your old home (if it sells for the value $230k) to see the maximum house you can buy.

Here is the income that you can use currently. The income from your part time job can be used. You will also be able to use your wife's social security income. Some lenders may even allow you to gross up your wife’s social security income by as much as 125%. (For example, if she brings in $400 per month in SSI, some lenders will let you gross it up to $500 per month.) You can also use whatever interest you are earning on your investments.

Add these monthly figures together and multiply the total by 40%, and that will give you a general idea of how much of a mortgage payment you will qualify for. Keep in mind that monthly figure must include a figure for whatever your taxes and insurance are on a monthly basis.

Most lending companies will require you to be employed in order to qualify for a loan. If your retirement and the disability is sufficient to satisfy the debt to income ratio, you should be ok. The change in loan requirements will not likely have a significant impact on what you are trying to do now vs. doing it before the change.

This is a great question for a loan officer, so I hope one responds for you. If not, give me a call and I can get you in touch with one.

JIM
Well, a lot of this depends upon your current home value and the lien owed on it.
Have you refinanced it in the last few years?
[REFI]
To your knowledge, is your home currently in a declining market?
If it is then you may have trouble obtaining the value that you want.
To find answers to that question, maybe the best thing to do would be to contact an appraiser and ask that question. They can easily find an approximate value for you over the phone.
[PURCHASE]
In regards to the purchase, things would be a lot more flexible with a purchase in a declining market. This is a buyers market. Don't let anyone say differently to you.
What type of loan you get really depends upon whether or not you sell your present home first.

Your wife's income can also be used, SS disability, definitely a verifiable source of income. To use her income, she would also need to be on the loan.

I provide competitive national prime lending, and your credit score definitely fits into that category. You are welcome to call me directly 510.776.5875.
Best,
Patrick