My husband's parents own the home and land we have lived in for the past 6 months. We have paid the note and all bills every month, and have made a few minor improvements to the house and land. They will sell it to us for 45000, and the value is over 60000 for the house and land.
Our issue is that we have very bad credit in the 400-550 range-ish. Yes, it's our fault, and we do take responsibility, and we have begun the clean up process by paying everything off in increments. My husband is a disabled veteran with a for sure steady income that more than supplies the payments for the note and monthly costs. Our past two W2s show that. Also, we plan to attempt the VA Loan, which doesn't require a down payment.

The house is ours regardless, even if we have to rent to own. But obviously, the ideal matter would be to buy it for ourselves and get their names off of the notes so that they qualify for the loan to build their dream house.

My question is this: Since we can prove that we have paid the notes and all utilities for the past 6 months, the selling price is 20000 less than the appraised value, we can show that we have steady income, and we are buying from our parents, will we still be able to get the loan despite our deplorable credit?
We live in Texas where interest rates are at 4% for great credit right now, so we are hoping that we can snag a lower rate at this opportune time if at all possible.

Advice?