Guide
Why mortgage applications get denied (2025 data)
Denial rates by loan type and the reasons lenders gave, from 2025 HMDA records.
Updated October 24, 2026
Lenders denied 8.5% of completed home-purchase applications in 2025 (269,748 of 3,191,127). Applications that were withdrawn or left incomplete are not counted.
| Loan type | Purchase denial rate |
|---|---|
| Conventional | 7.1% |
| FHA | 12.5% |
| VA | 8.0% |
| USDA | 12.5% |
The reasons lenders gave
| First reason reported | Share of denials |
|---|---|
| Debt-to-income ratio | 38.9% |
| Collateral (appraisal/property) | 14.7% |
| Credit history | 14.1% |
| Credit application incomplete | 8.3% |
| Other | 8.3% |
| Unverifiable information | 6.5% |
| Insufficient cash (down payment/closing costs) | 6.4% |
| Employment history | 2.8% |
| Mortgage insurance denied | 0.1% |
How to avoid the most common problems
- Debt-to-income: pay down revolving balances before applying, avoid new car loans, and include all income you can document. See the DTI guide.
- Collateral: a low appraisal can sink a deal; an appraisal contingency protects your deposit.
- Credit history: check your reports for errors at AnnualCreditReport.com months before applying.
- Incomplete or unverifiable information: respond quickly to document requests; keep pay stubs, bank statements and tax returns ready.
Denial rates vary a lot by place and lender — see any county page or the rankings.
Data: FFIEC/CFPB HMDA 2025 public loan/application register; FHFA and HUD 2026 loan limits. Home-purchase figures cover owner-occupied single-family (1–4 unit) site-built homes, first-lien closed-end loans. Methodology