I have a feeling the answer will be "SOL".

Here is our situation and I'm looking for some advice.

DH is currently active duty AF and has a separation date of Nov '09, although he should start terminal leave sometime in Oct. The plan is for him to enter school full time starting in Jan and using the Post-911 GI Bill. He will not have a job, so his only income will be the BAH they give him ($1193).

I'm currently a SAHM, but am finishing up school for medical transcription. The goal is for me to be hired fulltime with benefits, by October.

The area we are moving into is high demand for its schools, so renting is pretty expensive. We have a daughter with special needs, so we are really hoping to live in this district. We're looking to rent a 3bd home for under $900. It may be possible, but most seem to be running $1200+, so it will be a challenge.

We've considered purchasing a home since it would be cheaper than renting and it would be 'ours'.

Our credit is pretty low (DH is around 615-620 I think, mine probably in the 500s), and my income will be new at the time of application.

Do we have options? Or should we try to rent someplace? We'll be low income for awhile, especially since DH won't be working, and I've heard there are programs out there that may work for us.

I've tried researching, but it's all overwhelming. If getting approved for a mortgage is a possibility I'd like to blitz the finances now to get some debt paid off.

I don't have an exact salary range yet since I'm not employed, but we're thinking, with the BAH, we should be making around $3000-3200 monthly.

First off, blitz the finances and get as much debt paid off before your husband ends his job and goes to school. The financial burden during college is huge with a family. Secondly, since your income is what will be used, your credit scores need to get over 600. Even though VA doesn't care what your scores are, there are no lenders doing anything with less than 600 credit scores. Also, I would consider looking at some different neighborhoods. On top of a mortgage, you have property taxes and insurance that has to be paid. $900 a month typically equates to a $120,000 house. If rents are averaging $1200+ then you are looking in the wrong part of town. Find a suitable starter home or rent somewhere else cheap for a while. Does the college he is going to offer family housing? Be objective and live within your means.

I was going to pay off as much debt as possible, sorry to make it sound otherwise.

There are reasonable homes for $100k or so in the area we'd like to be in. I think rent are so high because it's a desirable area. Even smaller houses are expensive.

As for other areas, but story is not much different. Rent may be $50-100 cheaper, but there isn't a significant saving. I will be looking at the nicer of these areas. College housing may be available, but I've been there before and it really wouldn't suit our needs. They offer very small 2bedroom apartments on campus right next to the regular student apartments. It's loud and cramped. I just found out that the campus does offer 3 bedroom, but they are $1060 plus some extra fees per month. Wow!!

I'm just concerned that he won't be employed period that we won't stand a chance. He'll be getting BAH, but I'm not sure how they count that since it's not from an actual job. He may also have some VA disability, but we don't expect that to be more than a few hundred.

Just to clarify it, it is not BAH, it is a VA housing allowance based on the current rate of BAH for an E-5 in the zip code of the school.