The 6 documents every borrower needs
These apply to every W-2 borrower, on every program (FHA, VA, Conventional, USDA). Have them scanned as PDFs before you contact a loan officer and you'll cut days off the timeline.
- ✓ Photo ID — driver's license or passport, front and back
- ✓ Pay stubs — most recent 30 days, all jobs
- ✓ W-2s — last 2 years, all employers
- ✓ Bank & asset statements — last 2 months, every account you'd use for down payment or reserves (all pages, even blank ones)
- ✓ Tax returns — last 2 years, personal (federal only, all schedules) — required if self-employed, commissioned, or bonus-heavy
- ✓ Credit authorization — signed disclosure so the LO can pull a tri-merge report
Situational documents (bring if any apply)
- DD-214 & Certificate of Eligibility — VA loans
- Gift letter — if any down payment funds are a gift; signed by donor, states funds are not a loan
- Divorce decree & child support order — if using support as income OR paying it as a debt
- Bankruptcy or foreclosure paperwork — full discharge docs if within the last 7 years
- Business tax returns & YTD P&L — self-employed borrowers with 25%+ ownership
- Rental agreements & Schedule E — if you own other property
- Retirement / 401(k) statements — if using retirement funds for down payment or reserves
Credit score tiers by program
| Program | Minimum FICO | Best pricing |
|---|---|---|
| FHA | 580 (500 w/ 10% down) | 680+ |
| Conventional | 620 | 740+ |
| VA | No VA minimum; lenders 580–620 | 720+ |
| USDA | 640 (automated) / 620 (manual) | 700+ |
Lenders use the middle of three FICO scores from Experian, Equifax, and TransUnion — not FICO 8 or VantageScore from Credit Karma. Expect your mortgage middle score to run 20–40 points lower than what free apps show.
DTI benchmarks lenders actually enforce
Debt-to-income ratio is your monthly debt payments (including the new mortgage) divided by gross monthly income.
- Conventional (Fannie/Freddie): 45% standard, up to 50% with strong compensating factors (reserves, high FICO)
- FHA: 43% baseline, up to 56.9% with automated underwriting approval
- VA: No hard cap — uses residual income instead. 41% DTI is the flag threshold.
- USDA: 41% back-end without waiver, 46% with GUS approval
Want to see where you stand? Read the full DTI breakdown or run the Scorecard for your exact ratio.
Down payment & reserve requirements
| Program | Min down | Reserves |
|---|---|---|
| FHA | 3.5% | 0–2 months (case-by-case) |
| Conventional 97 | 3% | 0–2 months |
| Conventional (standard) | 5% | 2–6 months |
| VA | 0% | 0 months (owner-occupied) |
| USDA | 0% | 0 months |
"Reserves" means months of PITI (principal, interest, taxes, insurance) sitting in an account after closing. Retirement accounts count at 60–70% of vested balance.
How to get preapproved — the 5-step process
- Pick a licensed loan officer (verify NMLS # at nmlsconsumeraccess.org). Don't use a random online lead form.
- Complete Form 1003 — the Uniform Residential Loan Application. Takes 15–20 minutes online.
- Upload the 6-doc checklist above via the lender's secure portal.
- Authorize the credit pull — this is a hard inquiry. All mortgage pulls in a 45-day window count as one for FICO scoring.
- Get a DU/LP-backed pre-approval letter — not a "prequalification." A real pre-approval runs your file through Fannie Mae's Desktop Underwriter or Freddie Mac's Loan Product Advisor and returns an Approve/Eligible finding.
Prequalification is a self-reported estimate with a soft credit pull. Pre-approval is a verified, underwriter-backed commitment with a hard pull. Sellers and listing agents ignore prequalification letters in a competitive market.
What NOT to do between pre-approval and closing
- Don't open new credit cards, auto loans, or store cards — every new tradeline re-scores your file.
- Don't make large unexplained deposits — anything over 50% of monthly income needs a paper trail.
- Don't change jobs (especially from W-2 to 1099 or salary to commission) without telling your LO first.
- Don't pay off collections without asking — sometimes it re-ages the debt and drops your score.
- Don't co-sign for anything. It counts as your debt on DTI.
How long a pre-approval lasts
Standard pre-approval letters are valid 60–90 days. After that the credit report expires (120-day max under Fannie/Freddie rules) and your LO has to re-pull. Pay stubs and bank statements older than 30 days at closing also need refreshing.
Where to go from here
- Take the Scorecard — get your exact DTI, credit tier, and program eligibility in 60 seconds, no credit pull.
- Compare programs once you know which ones you qualify for.
- Deep dive on DTI — the ratio underwriters obsess over.
- First-time buyer roadmap — the 8-step journey from pre-approval to keys.