ANSWER:

What counts is his religious practice and moral conduct. If he has both and is earning well, it doesn’t matter how illiterate he is.

If he is unable to provide for you a separate accommodation, this is a good reason to reject him. 

I got an alliance, where groom is having good aklaq & deen but he’s illiterate, also I can’t maintain mehram thing in his home, his residing place itself a very worst Area. ALHAMDULILLAH I’m a 2 degree holder, accordin to deen he is ok fr me but my fear is tat in future we might get lots of misunderstanding due to his illiteracy. I’m in totally big confusion. Give me some suggestions dear Sheik.