There are new programs available that will allow to buy with a bad credit, but they do require more money down and their interest rate is higher. The best line of action is to fix your wife's credit.
You need to find a good mortgage pro that can recommend a credit repair company.
There are many credit repair companies, but not all are legit.
Other things to do is to get rid of your wife's outstanding debt - completely, if possible,
or get it down to 30% of available credit, on all credit lines.
If her credit is "underdeveloped", then you need to open secure credit card lines of credit.
You need a total of 4 good credit lines - 24 months long each.
Make sure that your credit lines are reported to credit agencies - by asking the bank rep.
Additionally, you can contact credit agencies requesting to eliminate the wrong info - if any.
They are supposed to respond within 30 days.
Hope this helps,
Beachfront Realty, Inc.
Sr. Mortgage Banker
NMLS # 659743
FHA with a minimum credit score of 620
VA with a minimum credit score of 640
Conventional loans 95% LTV
Condos with limited review
Foreign National Loans
Private Money Loans
FHA 203K Rehab Loans