Sam - your situation sounds challenging but if it's properly documented, and you have enough qualifying income, then you could potentially to qualify for a home to "live in" (it's not "living" - although it sounds very similar).
From your other question I see you've been doing real estate investing for 7 years, and back in 2007 you had a lot of trouble including losing some properties, so in addition to your bankruptcy, if any of those properties mortgages were included then that is also a foreclosure, although it's likely still long enough for them not to impede your ability to obtain a mortgage. The key is that you'll need to be at least 3 years out from the most recent foreclosure (it goes by the sale date), and then you become eligible for FHA financing. Re-established credit is needed too, but at a 691 score it sounds like you may have that part already taken care of.
For your income, being a real estate investor, you need to have claimed your gains on your tax return, i.e. "capital gains" on Schedule D of IRS Form 1040. You need to have reported capital gains income for at least the most recent 2 years AND be able to provide supporting documentation to establish that you do real estate investing for a living (copies of past Final HUD-1 statements, real estate license, etc.).
Your prior hard money financing would also need to be made note of, because underwriters will want to make sure you honored all of your payment agreements on those mortgages (particularly in the past 24 months) or else it'll decrease the chances of getting approved (mortgage late payments after a bankruptcy and/or foreclosure are very bad to have).
You also indicated in your other question that you felt like you may need a "change of scenery" to a new area, and that would play a very big part in the likelihood of an underwriter accepting your real estate investing income as being able to continue - because if you move to a completely different geographic area you don't have a proven track record of real estate investment income in that area. It's fine to say you will continue investing in Boston where you have been successful doing so (or at least since you lost your shirt), but an underwriter will certainly want to confirm you currently own real estate that you can sell for profit to make future mortgage payments. If you stay in the Boston area in my opinion you'll have easier time getting a mortgage for a home for your family to live in.
Shane Milne | Loan Officer in Orange County, CA | NMLS #81195
Direct local #'s: 949-273-4161 or 646-257-4842
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