The only time I have had any loans turned down due to income had to do with the back end ratio.  Sometimes we have debts show up the borrower did not tell us about and it didn't appear on their credit report. This typically is the DTI (debt to income) ratio for debts & mortgage payment.  CONV caps this ratio at 50%, FHA will go as high as 55% +/- depending on other qualifying factors.  We have a CONV HIGH BALANCE program which caps at 43% DTI but it allows up to a max loan of $726,525 as compared to $484,350! There are alternative programs as well some lenders have that others don't but all in all lenders want to make loans!  They will try whatever to possibly make it work but there are strict guidelines in place they must follow as well!