The bad credit is a concern, but I'm often surprised at the number of people I talk to who think they have bad credit but it's actually acceptable (I'm less surprised when it's the other way around). You meet with a loan officer and find out if you can qualify and for how much. If you do need to improve your credit, most lenders can provide some guidance, or refer you to someone who can.
Not just the credit alone with a fixed income I could see DTI issues coming into play if you have large amounts of debt. Really, the only way to know is speak with a good loan officer. If you are willing to do what is necessary to improve your credit there is always government programs out there for housing.