In doing some homework, I found a USDA DTI Waiver form. If they just include the child support from the separation agreement and don't count the marital home mortgage, I'm golden and can stop worrying about anything but getting my score to 660. Under "Compensating Factors:
1. Has rent for the past 12 months similar to the new PITI and/or accumulated savings that when added to the former rent shows capacity to repay the new PITI. (Current rent: $1200. New PITI: $900)
2. There is only a minimal increase in the applicants housing expense.
3. Has good credit history, reflected in a credit score which is 660 or higher.
4. The co-applicant has a credit score of 660 or higher.
5. Has demonstrated a conservative attitude toward the use of credit and the ability to accumulate savings.
6. Has stable employment for the past two years, demonstrating dependable income.
7. Has potential for increased earnings, indicated by job training or education in the applicant’s profession.
8. Will have substantial cash reserves after all closing costs and fees are paid. Amount = $ ___________.
9. Has income and/or benefits of approx. $_______ per month not reflected in repayment income but indirectly supports mortgage repayment, such as income from a non-applicant spouse, food stamps or other public assistance. (wouldn't this be the child support from the unrecognized separation agreement and the promissory note?)
10. Has substantial non-taxable income not previously accounted for in the ratios.
11. Is purchasing a home as a result of relocation of the primary wage-earner and the secondary wage earner has an established history of employment, is expected to return to work, and there are reasonable job prospects and potential for securing employment in a similar profession in the new area.
12. The TD ratio includes co-signed or ex-spouse debts, and the primary borrower has demonstrated good repayment history. It appears that the GRH applicant will not need to make payments on this debt. (Provide documentation of the debt and evidence the primary borrower has been making payments past 12 months.) ("Marital home" mortgage: Promissory note/separation agreement seems to cover this one as well as proof that estranged spouse has been paying?)
13. A low TD ratio, which by itself does not compensate for a high PITI; but because other strong
compensating factors are present as checked above, it is viewed as a positive mitigating factor.
Starting Score: 10/1/2011 EQ 568 TU 593
Current Score: EQ 664 TU 700 EX 701 (FAKO)
