Ok if you get a 2 bed place pre graces birth you and OH, the hb ppl look at you and say well they are a couple they only NEED 1 bedroom so we give them hb based upon that. When grace comes along tell them straight away you have a LO and they say well a couple plus baby they can claim for two rooms (that's what happened with us in the area I said) also make sure you pre prepare as much evidence as poss! 3 months bank statements for anyone in house, I'd -passport and driving license (different for each of you) bill with the adress on, proof of rent, proof of outgoings and income (anything) ...... Erm....
Its better to apply as you are/would be you and dan and then the second baby grace is born take in birth certificate! You'll prob not feel like it but its just something that needs to be done. And do it as a change of circs. They photocopy all info there and then so they don't keep any first copies (iykwim). If you want more info from me (we did the exact same and had to jump thru the hoops a couple months before J) then pm me or fb me x