Thanks to all for the ideas and suggestions. I gathered a little more info and I think we have a plan:
- I called the Realtor who is listing the house she's interested in buying. I figured he's be motivated to find an answer, but he had no ideas beyond what we discussed here.
- I called USAA. We recently re-fi'ed our primary residence with them so they had all our financial info at their fingertips. It turns out DW and I could buy the place for MIL, or co-sign a loan with her (in which case the qualifying would be done on the average of FICA score and hers). Hands down this will be the simplest and cheapest way to go.
I spoke with my MIL on the phone, we discussed the advantages of her doing things in order: staying in her home until it's sold, then move to temporary housing (probably with us) while she takes her time to look for a house. That obviously negates the need for financing and also allows her to focus on one thing at a time. I think she's leaning toward this option.
What about a military-style move with one big container for the household goods, temporarily stored until she finds the new home, and a smaller container for "unaccompanied baggage"? She could live for a month or two in a furnished or unfurnished efficiency, or in a residential hotel.
I think this is what we'll do. I think she'd prefer a crate-up (one of those CONEX-like deals) rather than have cardboard boxes and furniture in a warehouse.
Look up asset depletion mortgage.
USAA ran the numbers, but I think their criteria must be very conservative as she wouldn't qualify based on her assets.
One option that may work in your MIL's case may be to put contingencies on either or both sides of the transactions.
Thanks for the idea, but I think she'll be able to keep things simpler than that. She's not on a particular time schedule, so she can sell and buy without contingencies, which should move things along faster and (hopefully) result in better prices for her on each transaction.
How old is she? Does she really need to own her own home? Can she afford to own her own home even if there is no mortgage (large repairs, proper ongoing maintenance)?
Those are concerns, but she wants a house. She's a practical lady, has raised 5 kids, and she and her hubby saved enough money so they could live as they choose in retirement. He's gone now, and I think she'll enjoy having a small yard to fuss over for the next decade.
Finally, she could sell the old home and move into some temporary digs and then move into her new home. My sister is doing this right now as their old home sold much quicker than the thought it would and their new home isn't built yet. Most of their belongings are going into storage, and they are just taking essentials with them to the temporary digs to minimize the inconvenience of two moves.
I think this is the way we'll do it.
Oh, I learned something else: When I called USAA they shunted me over to some kind of USAA/Wells Fargo joint venture called "Military Family Home Loans". First glimpse: This looks like bad news. I had to repeat information a few times, spent 10 minutes on hold without any indication of how long I'd be waiting, and finally gave up. This was definitely
not the great USAA customer service I'm used to. If I do end up going for a USAA mortgage I will do what I can to get a loan serviced by USAA and avoid this USAA/Wells Fargo lashup. If that's possible.