Different lenders have different guidelines and interpretations of guidelines. Some are willing to make exceptions that others are not. So the fact is, while one lender may reject your application, another might welcome it. If you've gone to your local bank and been given a "no" proceed to a mortgage broker. Mortgage brokers are paid on production and are more willing to explore options with you. In addition, they have multiple sources and will research those sources looking for a loan that fits your situation. Credit Unions can also be a good source of loan programs that other banks don't have.
So don't give up. If you know you have the down payment funds you need, a steady income, and a history of paying your bills, keep trying. You may not yet qualify to purchase the home of your dreams, but you can probably qualify to buy a good home that will allow you to begin building equity – so that in a few years you WILL be able to "trade up" and buy your dream home.
If you need a referral to a good Central Florida lender or mortgage broker, give me a call. I can give you names and numbers of lenders who have served my clients well.