Need Advice

Retirement income, pensions, social security are all acceptable sources of qualifying income. So is rent if you are properly listing it on your tax returns. In my humble personal opinion, I would mandate the "kids" work on getting their credit up and putting themselves in position to properly purchase the home like responsible adults. Rare is it that people who put forth proper effort, combined with a little bit of time, that someone can't improve their credit scores. There are also bad credit loans that may be an option. Next, while you have an adjustable loan, and it is probably going to go up, I'd just pass the costs onto them. Retirees should never put themselves into financial trouble over adult children. The other option, again, dealing with responsible adults, would be to simply sell them home and let the chips fall where they may.