Stay away from the lease purchase options! They're not for everybody; especially if you know you have the high probability (%) of being denied for another home loan, before the terms of agreement (lease option to purchase) expired to secure the financing necessary, to exercise the option of purchasing the home. Pay off your debt, put your money in money market savings account (build up down payment) and reestablish your credit worthiness. Rent for a while, because of the way the current real estate market situation is and some of the financial institutions going belly up (wherever you're considering purchasing) it's not going to suddenly change and start peaking in the next 3-5 years as many will hope to see.
Sellers are having a bad enough time selling their property with the stock of foreclosure homes (depending on area) on the market that they're competing against, real estate agents can't moving inventory quickly as before and not enough buyers in the market that are ready to buy or qualified to buy or their being smart and waiting for right home and right deal (location, location, location) to come along. So sit just back and chill!... more