My husband was also born with hypospadias, his urethra opening is also about 1/2 was down the shaft of his penis. He like your husband spent time as a child having surgery to repair his urethra, it was never successful. We were married May 14, 2011 and were hoping to start a family sooner than later. We made an appointment with his family Dr and found out that he too had undescended testicles that never formed properly. We figured we might need some help getting pregnant but we had no idea he was sterile.
I'm not saying this is the case for you and your husband but mine had an operation on
his underdeveloped testicles at the age of 2 that left him sterile. His family failed to share this information until confronted and to this day they deny that they ever knew.
So since this news we have seen a fertility clinic and after some discussion have decided to use a sperm donor in order to be parents
My advice would be to get to your Dr, know the facts about his condition and yours and get the recommendation of a good fertility clinic.
Hope it all works out for you