By Ziya Y. · 23 Years Banking · FinanceRateCalc Decision Intelligence System
Before spending time house hunting and risking credit pulls, it helps to understand your real approval odds. Mortgage approval depends on four core factors — and how they interact with different lender types.
FHA floor is 580. Conventional is 620. But lender overlays commonly push these to 620-660. A 630 score may mean denial at most banks but approval under FHA with the right lender.
FHA allows up to 57% DTI with compensating factors. Conventional caps at 50%. Many lenders add overlays at 43-45%. Your DTI may be "too high" for one lender type but perfectly acceptable under agency standards.
W-2 income is simplest. SSDI, self-employed, pension, and physician income all have specific rules — and lenders vary widely in how they apply them. SSDI can be grossed up 25% under conventional guidelines; some lenders refuse it entirely.
This is the hidden variable. Two borrowers with identical profiles can get different outcomes at different lenders due to overlay rules. FRC's Pre-Denial Intelligence maps this before you apply.
Prices and rates are widely reported. Whether a lender says yes is not. In the complete 2025 federal record, denial rates across the 100 largest FHA lenders ran from 1.8% to 78.7% — same programme, same year.
And it is not simply who applies where: standardizing on state, loan amount, income, debt-to-income and loan-to-value, applicant mix explains only a 2.7× range in expected outcomes.
CFPB HMDA 2025, computed by FinanceRateCalc. Covers the highest-volume lenders published per market, not all lenders. Historical observations, not predictions. CC BY 4.0, not independently reproduced.