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

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:

Most traditional lenders prefer a score of at least for conventional loans. However, several government-backed programs are specifically designed for lower-credit borrowers:

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