In 2025, about one in eight home-purchase applications in Oakland County was turned down. Federal lending records show where the real cutoff is, and how today's higher rates move borrowers closer to it.
By BIG Real Estate · November 3, 2026
Most buyers worry about their credit score. Federal mortgage records suggest a second number deserves as much attention: the debt-to-income ratio, or DTI. That is your total monthly debt payments, including the new mortgage payment, property taxes and insurance, divided by your gross monthly income.
We looked at every 2025 home-purchase application in Oakland County that lenders reported under the federal Home Mortgage Disclosure Act (HMDA). Below a 50% debt-to-income ratio, applicants with very different debt loads were approved at nearly the same rate. Above 50%, denials jumped. That matters now because the 30-year mortgage rate averaged 7.24% in Freddie Mac's survey for the week of Oct. 29, 2026. The typical 2025 buyer in these records got 6.625%, and the middle half paid between 6.125% and 6.875%. A higher rate raises the payment on the same loan, which raises DTI, and some buyers who would have qualified last year now cross the line.
What the 2025 records show
We used the FFIEC HMDA Data Browser file of 2025 home-purchase applications for Oakland County. We kept first-lien loans on one-unit homes the buyer planned to live in, and left out reverse mortgages, home-equity lines and business loans. Lenders made a decision on 15,296 of those applications: 12,899 became loans, 422 were approved but the buyer didn't go ahead, and 1,975 were denied. Another 2,699 applications were withdrawn and 571 were closed as incomplete. Those are left out of the denial rate.
That gives a denial rate of 12.9% for Oakland County in 2025, up from 11.9% in 2024. Statewide, the same calculation gives 15.8% for 2025.
An application is not the same as a person. A buyer who applies to two lenders appears twice, and someone denied once may have bought later with a different loan. These are application outcomes, not a count of households shut out of the market.
The real cutoff is 50%, not 43%
Many buyers have heard that 43% is the most debt a lender will allow. The Oakland County data does not show a cutoff there. Denial rates by debt-to-income ratio (the lender's calculation), 2025:
- Under 20%: 743 applications decided, 102 denied (13.7%)
- 20% to under 30%: 2,575 decided, 223 denied (8.7%)
- 30% to under 36%: 2,672 decided, 196 denied (7.3%)
- 36% to 42%: 3,730 decided, 267 denied (7.2%)
- 43% to 49%: 4,133 decided, 347 denied (8.4%)
- 50% to 60%: 821 decided, 326 denied (39.7%)
- Over 60%: 445 decided, 416 denied (93.5%)
Source: FFIEC HMDA 2025, Oakland County home-purchase applications; BIG Real Estate calculations.
From 30% to 49%, the denial rate stayed between about 7% and 8.5%. At 50% it jumped to about 40%, and above 60% nearly every application was refused. The under-20% group has a slightly higher rate, probably because it includes applications denied for other reasons, such as credit history or missing paperwork. The low debt itself is not the likely cause.
The 50% line matches the rulebook. Fannie Mae's Selling Guide sets 50% as the maximum DTI for loans run through its automated underwriting system, Desktop Underwriter. Its manual-underwriting limit is 36%, or up to 45% if the borrower meets credit-score and reserve requirements. A June 2026 St. Louis Fed analysis of national HMDA data through 2024 found the same pattern. Denial rates were flat between 20% and 50% DTI, there was no meaningful jump at 43%, and the authors called 50% the real underwriting cliff. Oakland County's 2025 numbers look the same.
Above 50%, loan type matters a lot
The 50% cliff is mostly a conventional-loan cliff. Among Oakland County applications with a DTI of 50% to 60% in 2025:
- Conventional loans: 270 of 361 decided applications were denied (75%).
- FHA loans: 49 of 346 were denied (14%).
- VA loans: 7 of 114 were denied (6%).
In other words, government-backed loans made up most of the approvals in that range. FHA and VA underwriting lets borrowers carry more debt when other parts of the file are strong. Those loans have their own costs and requirements, so a buyer near the limit should compare options with a lender rather than assume one type is better.
The most common reasons for denial
When lenders deny an application, HMDA asks them to report up to four reasons. Here are the principal reasons in Oakland County for 2025, as a share of denials:
- Credit history: 34.1%
- Debt-to-income ratio: 33.5%
- Collateral (usually the appraisal or the property): 12.0%
- Application incomplete: 6.9%
- Other: 5.5%
- Insufficient cash for down payment or closing costs: 3.6%
- Unverifiable information: 3.3%
- Employment history: 1.1%
Counting every reason a lender listed, not just the first, credit history appeared on 41% of denials and DTI on 40%. Insufficient cash appeared on 25%. It is rarely the main reason, but it often comes up alongside the main reason.
One change from 2024 stands out. Credit history was the principal reason for 23.5% of Oakland denials in 2024 and 34.1% in 2025. Debt-to-income stayed about the same (36.6% in 2024, 33.5% in 2025). The public data has no credit scores, so it can't explain the change. It could reflect household finances, lender standards or a shift in which lenders received applications. We report it as a change in the data, not a confirmed trend.
Income and down payment tell a similar story
Denial rates fell steadily as income rose. Applicants reporting under $60,000 were denied 41.7% of the time. The rate was 13.8% at $60,000 to $99,000, 6.8% at $100,000 to $149,000, and 3.0% at $250,000 and up. Large down payments helped too. Applications with a combined loan-to-value ratio of 80% or less (20% or more down) were denied 5.0% of the time, compared with 12.9% for those borrowing more than 95%.
Income is not the reason by itself. Lower-income applicants are more likely to have a high DTI, thinner credit files and little cash left after closing. Still, the gap shows where the market is hardest for first-time buyers.
What 7.24% does to a borderline buyer
Take the typical financed Oakland County buyer from 2025: a household income of about $126,000 and a loan of about $315,000 (county medians from the same records). Here is the 30-year principal-and-interest payment at three rates:
- 5.98% (2026 low, Feb. 26): $1,885 a month, 18.0% of gross monthly income
- 6.625% (typical 2025 rate): $2,017 a month, 19.2%
- 7.24% (Oct. 29, 2026): $2,147 a month, 20.4%
Excludes property taxes, insurance and mortgage insurance, which lenders also count. Rates: Freddie Mac PMMS via FRED. BIG Real Estate calculations.
Moving from 6.625% to 7.24% adds about $130 a month. For this household, that raises DTI by about 1.2 percentage points. A buyer at 48% last year would be at about 49.2% today, still under the line but with almost no margin. Any new car payment, student-loan change or higher tax estimate could push the file over 50%.
That margin was thin for many 2025 buyers. 731 of the 12,899 Oakland County purchase loans made in 2025 (5.7%) had a DTI of exactly 49%, the highest whole-number band HMDA reports below 50%. In all, 1,770 loans (13.7%) were at 47% to 49%. Some of those buyers could not borrow the same amount at today's rate. To keep the same payment at 7.24%, the $315,000 loan drops to about $296,000, roughly 6% less.
Property taxes count in DTI too. In Michigan, a home's taxable value is usually reset to its state equalized value the year after a sale. Make sure your lender estimates the new tax bill, not the seller's. Our guide to Michigan property tax uncapping explains how much that can add.
What buyers can do before applying
- Ask your lender what DTI you'd be at, using the post-sale tax bill. Ask the loan officer for the full ratio, not just a pre-approval amount. If you're at 47% to 49%, you're close to the line, and a small change can push you over before closing.
- Avoid new debt between pre-approval and closing. Lenders often recheck credit before closing. A car loan or new credit card can change the result even after you're under contract.
- Check your credit reports early. Credit history was the most common principal reason for denial in 2025. Free reports from all three bureaus are available at AnnualCreditReport.com, the source authorized by federal law. Disputes take time, so start before house hunting.
- Compare loan types if you're near 50%. The 2025 data shows FHA and VA approvals were far more common above 50% DTI than conventional approvals. Each has its own fees, mortgage-insurance rules and property standards, so compare the total cost.
- Budget cash beyond the down payment. Insufficient cash appeared on a quarter of denials. Closing costs, prepaid taxes and escrow, and any required reserves all come due at closing.
- If you're denied, ask why in writing. Under the federal Equal Credit Opportunity Act rules (Regulation B, 12 CFR 1002.9), a lender generally must notify you within 30 days of a completed application. The notice must either state the specific reasons for the denial or tell you how to request them. Vague answers like "didn't meet our internal standards" are not enough.
What sellers should take from this
A buyer's pre-approval letter doesn't show how close they are to the limit. In a market where Oakland County listings were up about 25% from a year earlier in September (our September market report), a deal that falls through costs time. Ask your agent to have the buyer's lender confirm the loan type and that the approval reflects current rates. When negotiating, remember that a seller credit toward a rate buydown can lower a buyer's DTI. A small price cut usually lowers it less. Our fall selling guide covers that trade-off.
What this data can't tell you
HMDA describes 2025 applications. It doesn't include credit scores, assets or the lender's full underwriting file, and some small lenders don't report. The DTI figure is the lender's own calculation. Denied applications sometimes report no DTI at all (177 decided applications had none). Reported reasons are the lender's summary, and "Other" is not explained. The 2026 data, expected around March 2027, will show whether 7% rates pushed more Oakland applicants over the 50% line.
The takeaway is simple. In Oakland County, debt levels up to 49% of income were approved about as often as much lower ones, and denials jumped at 50%. With rates higher than last year, more buyers are near that line, and a lender can tell you exactly how close you are.
This article is general information, not mortgage, credit or legal advice. Underwriting rules vary by lender and loan program and change over time; confirm your own situation with a licensed lender. Figures are from public HMDA records as described above; calculations are BIG Real Estate's.