My business partner is trying to get financed for a home loan. He has a poor credit score from his younger years (less than 620) that is very slowly improving. Our business is 7 years old, but has only been large enough to support his family for the last 2 years (only one year of significant income from self-employment based on tax returns). His wife works, but he makes enough to support the family (her paychecks go to savings).
He is trying to buy the home he is currently renting. Monthly rent is $1100. He has never missed a payment in 3 years. Estimated mortgage payments are about $900, so he can obviously afford the payments based on his rental history. He has been having trouble finding a lender because of his poor credit score, and because he is self employed.
What options does he have to buy the home, and what can he do to improve his chances of being approved without major lifestyle changes (i.e. getting a new job, moving elsewhere, etc)?