Even with debt or a low credit score, you might be able to get an FHA loan, and you need to qualify for the 'primary resident' criteria (not investment property).
The Federal Housing Administration (FHA) provides backing for FHA loans, but you have to pay mortgage insurance.
The requirement that all applications for FHA-backed home loan approval have not changed.
Regarding cash to close, the FHA has fairly strict guidelines.
Cash used for closing must be certified, seasoned, and traceable for at least two months.
FHA applicants must have a minimum FICO score of 580 to finance 96.5% of the price of the home.
The LTV cap is set at 90% for applicants with scores between 500 and 579.
Some people wait to obtain an FHA loan until they have 20% equity in their home.
After closing, the property must be occupied within 60 days.
For borrowers with credit scores of 580 or higher, the down payment requirement for an FHA loan is 3.5%.