Can we even make this work? Turning primary into fental

[Tessa Rysztak]

Kind of a long story. My husband has a foreclosure from 2010. The sheriff's sale was in April 2010 and the deed went from his name to the bank of April 28, 2010. There was a 6 month redemption period, and the county has another Sherriff deed transaction listed on their website (but there was no deed transfer as it had already happened in April) on October 28th 2010, it says "to lending institution" in the notes. We are in Michigan.

We have found a new property for our primary residence and want to keep our current residence and start renting it. We have a verbal acceptance on the new house. With us leasing the house from January until May 1 of 2017, which I believe would put us past the 7 year wait for conventional. Our mortgage broker keeps saying it would just be easier to list our current home and go FHA. The sellers wants a preapproval letter before they will sign the papers (which I totally understand). We can get an FHA preapproval, but not conventional until closer to the end of the 7 year wait, from what our lender is saying.

So my first question is, is the 7 year wait for sure from the date of the sherriff sale? It's hard to find a definitive answer on this.  I don't want to get to April 1st and find out we can't even apply for the mortgage until April 29th.

Second question is, can we get an FHA prespproval and submit that with the offer, but change to conventional financing before we close?

Thanks for any insight!