It appears that you may be able to squeak by and get some type of mortgage for your home. Please understand that a low credit score of 580 is considered a poor credit rating. You will be paying for your poor credit for years. The interest rate on your mortgage is going to be higher, utilities for your home higher, insurance for your home and car higher all a result of your credit rating.
Why not work to improve your credit rating first, then apply for a sensible mortgage? There are a variety of good mortgage products that get very interesting once you get above the 720 point range. I have written blogs and articles on the subject matter here on Trulia.
Step 1 improve your credit rating
Step 2 find a quality mortgage product that is good for you and set yourself up for success long term
Step 3 find a home that suits you and your family.
Hannah Fliegel, FICO Pro
The Credit Repair Expert
Give me a call or email me with more info and I can direct you to the bank that was handling these loans IN McHenry County.
Peggy Baker, Broker Associate (224-805-1068)