FHA DTI???

[Anonymous]

HI there,

Does anybody know what the max DTI for an FHA loan is?  We are currently trying to seek a second home (we will rent out our first) and we've been told that 53% DTI could still get you qualified for FHA.  Is that possible and do you know the max?

Thanks!!

[Anonymous]

43% is the max guideline.  ANything above that is an exception based on compensating factors.  Is 53% possible? Yes.  Is it normal, no.  For 54%, they are going to be looking for great credit history, decent equity in both properties, strong reserves, and using the case of undocumented rental income as a compensating factor...

In other words, if you have a really strong file it may get approved.  If the file is middle of the road or borderline, chances go down greatly.  Since cases like this are bank by bank and case by case, there is no way to give you a strong indication of what your approval chances are, but equity, FICO, Down Payment, job history, and reserve information would be needed to even make a estimates guess.

[JM-AM]

Just a notation that the rental income must show on your tax returns, and until it does it will not be considered a rental and the present mortgage would count towards the DTI.

[OCcouple]

doesn't fha consider both front end and back end? IIRC it's 31 for the front

[ShanetheMortgageMan]

56.99% is the highest total debt ratio I've seen get approved by automated underwriting recently, 45.99% is the highest housing portion of the debt ratio.  Anything over 45% should be well qualified, meaning good credit and having several months of the housing payment in the bank available after closing.

[Anonymous]

APPROVED!!!  535% DTI with two mortgages. Even the broker was a little shocked!!

[Anonymous]

Woops, I meant 53% DTI and approved.  Not 535% DTI...just to clarify!

[JM-AM]

Congrats very good luck with your new home

[Anonymous]

Thanks again JM-AM!  I thought I'd follow up because often times people don't report back after they get the final clarification and I really want them too!

[Lel]

Congratulations!

I have a related question for you.  You mentioned on a different thread that your score changed when an account was in dispute:

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/credit-score-while-account-is-in-dispute/...

So you were actually able to get approved with an open dispute on your credit reports?  That goes against conventional wisdom, and the experience of most people on these boards.