All the Best
Dave & Lisa
First of all..Good for you! Get out there and make something of this current economy in Rock County. I would check with your personal bank and see what they can do for you. If they cannot help you, feel free to give me a call (608)290-9538. I am a Sales Agent for Realty Executives and own my own Real Estate appraisal company in Janesville. I have dealt with the good AND the bad lenders working on the appraisal side. It is not our place to tell you what to do, however a good local real estate professional is what you need to help steer you in the right direction. If you want my opinion feel free to contact me anytime.
Pay cash. (Don't laugh. Quite a few folks who've gone through a foreclosure haven't been paying their mortgage for a couple of years. With the collapse in prices in some areas, they now have enough to pay cash.)
Don't buy. Rent until you can rebuild your credit.
Have someone co-sign.
Look for owner financing.
Look for lease-options/rent-to-own.
Look for someone (friend, relative, etc.) to do an equity share arrangement.
Look for an investor who's willing to do creative financing.
Look for private financing.
And the list goes on. But that should get you started.
You have a couple choices such as leasing to own or finding a owner who will carry a loan (surprisingly called an owner-carry). There are several websites on which you can find lease-to-own properties (check google), which may be your best bet of these two options because an owner-carry requires that you convince the owner that you really are good for the payments. This may be hard if you have bad credit or little credit history.
However, you should talk to a lender. Mortgage brokers can help you figure out what you need to do to repair your credit if it is bad. If your problem is that you have a limited credit history, a lender may be able to establish that you are a good credit risk by looking into payments that would not feed into your credit score, such as utility payments, rent payments, etc.
If you do need help understanding your credit score, I would suggest you check out my blog post at: http://www.trulia.com/blog/rovtar/filter/category/Credit_Score/56