Though borrowers in some cities may qualify with lower credit scores, they'll usually have to pay more to make up for the higher credit risk that lower score represents to lenders, according to Bing Bai, a researcher who helped prepare the report for the Urban Institute, a policy research group.
"For higher credit risk borrowers with lower FICO and low down payment, the lender will tend to compensate by charging a higher rate," he said.
Part of the reason lenders are willing to approve borrowers with lower credit scores is that the city's housing market is distressed and demand is strong from lower income borrowers, who tend to have lower credit scores, he said.
Lower-income borrowers also tend to have smaller savings to apply to a home purchase. That's also why the average down payment is lower in Detroit than in San Francisco, said Bai.
The average loan-to-value ratio — the amount a lender is willing to approve as a share of the total value of the house — was 90 percent in Detroit, representing a 10 percent down payment.
In San Francisco, on the other extreme, the average loan-to-value ratio was 72 percent.
Higher income borrowers with bigger down payments can also avoid paying for mortgage insurance, said Bai.