DTI questions for USDA (calculations, waiver, etc.)

[Juniper117]

Can someone double check my work and let me know what they think about my situation?

I'm hoping to go the USDA route in a few months. I have had constant employement for 10+ years, but only been at my new job for a few months. My BASE (no over time) pay is $4333 a month. I have always had at least 10 hours of overtime a week, but I know (assume?) I can't count it so soon into the job.

I know the typical DTI for USDA Guaranteed is 29/41.

That would make my allowed PITI $1256 and my back-end $1776.

I have:

car payment $511 (want to refi, but don't wanna get an inq this soon before applying for a mortgage if I don't have to)

Defaulted PRIVATE student loans that I have been paying on for 2 years $200
Federal student loans that are on in-school deferrment, but I know will still be counted $75

All of those payments total $786, or 18%, meaning I would only have 23% ($996) available for housing.

1) Are those calculations correct?

2) Talk to me about waivers. I know they're available w/ compensating factors. Would my overtime be compensating? Will the fact that my student loans are in deferrment matter? Or is it just a high credit score or something like that? What type of waivers are typical?

3) If I get approved for, say, $160,000 and want to buy a home for $163k, can I bring the other $3k to make up the difference?

[Juniper117]

bump?

[thankfulheart]

YMMV, but this is what I've learned recently...

USDA will sometimes go up to 46% with compensating factors.

They will look at base pay, since OT is not guaranteed.  Might not even make a compensating factor unless you can prove a year of it at a steady rate.

Don't know about the defaulted private SLs, but your other ones WILL count, even in deferment.

I think I read a 660 middle score would qualify for the DTI waiver without compensating factors (not sure if that has changed)

Yes, you can make a down-payment to meet the approved amount.

Remember that "housing" includes taxes, insurance, HOA fees, as well as USDA funding fees, etc.

[wallacecody25]

From what I understand, they will accept overtime pay but it will be calculated from the previous 2 years and averaged and that's the amount they use. As far as the student loans, I have a defaulted student loan, but I have been making payments through the rehabilitation process, and I got the DOE to remove my entry from the caivrs system and I'm good to go now. Also, they told me the same thing with 660 middle score and DTI waiver. I'm not an expert but this is my understanding.