If traditional mortgages are out of reach, researchers point to more "creative" (though often riskier) financing: Hitting the Wall: Credit as an Impediment to Homeownership
Providing 20% or more can signal stability to a lender even if your score is low. can you buy a house with poor credit
Showing you have several months of "mortgage payments" in savings after closing reduces the lender's perceived risk. If traditional mortgages are out of reach, researchers
Targeted at rural development, these generally require a 640 score, but can offer exceptions for applicants with "compensating factors" like a very low debt-to-income ratio. 2. The "Compensating Factors" Strategy these generally require a 640 score
Lenders often look at the "entire financial picture" rather than just the number. Research from OJO Labs highlights that homeownership is "disproportionately difficult" for low-credit groups because they lack visibility into the tools that can offset a bad score. These "compensating factors" include:
For veterans and active-duty members, these often have no official minimum score, though many individual lenders set their own "overlays" (usually around 580–620).