I found this article to be very helpful and realistic. Major point is to start with your loan officer…
If you have a credit score that’s considered fair, poor or even bad, you may be assuming that qualifying for a mortgage is out of the question. While that’s true for some would-be borrowers who need to improve their finances as well as their credit, there are some mortgage options for homebuyers with less than perfect credit.
Your Credit Profile
Mortgage lenders rely heavily on your credit score to evaluate your qualifications for a home loan because your score indicates how you have handled credit in the past, which serves as a predictor of your future repayment pattern. According to Credit.com, excellent credit gets a score of 750 or above; good credit, 700-749; fair, 650-699; poor, 600-649; and bad credit is a score under 600.
Rather than guess at your credit profile, you need to request your free credit report and pay a small fee to get your credit score from http://www.annualcreditreport.com. Fix any errors and take steps to improve your score with improved financial behavior before applying for a mortgage loan. A lender can help you determine which steps will boost your credit score fastest (to continue reading, click on link)