Just to update up to this point.... I contacted another lender who told me "no problem", that I could do this without 25% down on the next home. Like I said, we aren't quite ready for divorce. We still are "friends" I guess you can say, and we don't have attorneys. We also don't plan on going to court yet. My wife and children are on my health insurance plan, and I plan on keeping all of them on for so long as we're legally married or until my wife becomes employed again. This second lender just asked if I had at least 10% down to put on my home, which will be my Primary Residence / Owner Occupied (just by me).

Are you saying this second lender is incorrect? I paid $50 to get pre-qualified, and will receive an answer in the next 2-3 days. I'm hoping the lender is correct!!!

As Erin said, I think your answer lies with your attorneys. Although I'd recommend a mediator over the prices you'll end up paying with divorce attorneys....that's a personal, not a professional opinion.

In the process of a divorce, all assets need to be disclosed by both parties. Any funds used in the purchase of this home will be considered in splitting the assets. And as long as you are in any stage of marriage, including legal separation, both spouses must sign on the purchase (if not only to acknowledge that they waive any right to the property).

the lender told you correctly.

Hi Dan: You may want to consider a lease/option and exercise your option after your divorce is settled. Of course, you should run it by your attorney before you do anything. That could get you into and area and price range you want to be in. If you want more details, you can find them by going to my website and clicking on the Rent to Own tab on the left side of the site.