They should talk with their case manager at the Housing Authority or whichever agency administers their Section 8.What I do know from our experience in working with Section 8 tenants, and this has happened before with one of our tenants, after one of the parties dies, the make up of the household and household income will be redetermined.

One option is Union Bank, offer a low down product for lower income households.

It is not uncommon to see changes in the makeup of a household.

You also agree to report immediately in writing to us: (i) any evidence of a water leak or excessive moisture in the dwelling unit, common hallways, storage room, garage or other common area; (ii) any evidence of mold that cannot be removed with a common household cleaner; (iii) any failure or malfunction in heating, ventilation or air conditioning, and (iv) any inoperable doors or windows.

I am actually getting ready to record an educational piece on this and will have it on YouTube soon but until then here are the factors that are considered.  1.Age of the property2.Demographic location and crime statistics3.Average household income4.Geographic and economic growth projections5.Annual appreciation forecast 6.Monthly Rental income7.AmenitiesAnd here is a break down based on the Texas market. 

From what I remember on that job, the bank wanted the package appraised for internal purposes and as they were all rental households operated by same owner, in the same small town Ohio, we were able to knock out like 128 units (mixture of SF and MF buildings) as a "single economic unit", or operated as an apartment essentially.

Was blessed to have a father that taught me the basics of plumbing, rough construction, electrical and other household repairs although I was not always a willing participant.

But your wife is your family, so your "household assets" would include them if you were to do a family net worth balance sheet thing.(2) Find another lender, they aren't investor friendly. 

You can get a second FHA loan if:1) you cosigned on a FHA loan for another individual but you now want your own home 2) you were divorced and no longer cohabitat the home with your ex-spouse and now want to buy your own3) larger family size and can literally document a larger household now via mammogram, adoption papers, letter of explanation,etc4) you are relocating to a new area and would like to use the FHA program again and have employer documented relocation papers/job offer to make any of the above work you need adequate time to plan, documentation, and a loan officer who can sell the above to their underwriter.Good Luck!

My two cents worth: Will this house hold it's value for at least a little while?