Re: USDA Loan Scenario Can we be approved in 6 months to a year?[ Edited ]
05-13-2010 08:51 AM - edited 05-13-2010 08:55 AM
Well other than normal household expenses (rent, water, elec., cable, car ins., cell phone, garbage) these are the only other items we owe. Our vehicles are free and clear. Exactly what bills do they take into consideration when they do DTI other than cc, loans, etc?
All the information about USDA loans can be downloaded from here http://www.rurdev.usda.gov/regs/hblist.html
Here's the relevant information from chapter 4:
HB-1-3550Paragraph 4.22 Determining Repayment Ability [7 CFR 3550.53(g)]
B. The TD Ratio
1. Maximum TD Ratio
The TD ratio compares applicant debt to repayment income. Applicants, regardlessof income, are considered to have repayment ability when they do not have to spendmore than 41 percent of repayment income on total debt.
2. Establishing TD
Total debt includes PITI, all long-term obligations, and short term-obligations thathave a significant impact on repayment ability. The following items should be counted:
• PITI -- Principal, Interest, Taxes, and Insurance (including leverage loan payments);
• Regular assessments, such as homeowner assessments;
• Long-term obligations with more than 6 months repayment remaining, includingloans, alimony, and child support;
• Payments that come due in the next 12 months;
• Deferred debt regardless of the length of the deferment period. Examples of deferreddebt are items purchased under a retailer’s “no payments until” offer and studentloans where repayment has not commenced since the borrower is still in school. Ifthe credit report does not reflect the anticipated monthly payment due at the end ofdeferment, the Loan Originator should obtain verification of the monthly paymentdirectly from the creditor or request a copy of the loan agreement from the applicant.For student loans, the monthly payment can be estimated using 1 percent of the loanbalance report on the credit report if the other verification methods are not feasible.
• The minimum monthly payment required for revolving credit card debts;
• Short-term obligations that are considered to have a significant impact on repayment ability, such as large medical bills and car or other credit payments.