topic Re: Can I qualify for FHA? in Mortgage Loans

Can I qualify for FHA?

Anonymous — Sun, 17 Mar 2013 15:36:35 GMT

Hi all -- I've heard many different things about DTI requirements for FHA... Some say you need to be low-40%, others say the back-end can be as high as 55%. I'm just hoping for some opinions for the likelihood of approval given my situation.

I'm applying by myself...

Credit scores: all mid 720s (no lates for several years... two items showing in collections -- one $29 charge showing paid, one $30 charge showing still owed for some reason... Other than that, I have not had any late payments in 2-3+ years.

Income: $60,000

Home price: $130,000

Debt: $1,300/Mo (student loans, car, credit cards)

Down payment: 3.5%

Cash reserves: $7,500 bank, $5,500 401K

I believe this puts me at 45-46% DTI when including PITI with my monthly debts...

Edit: Of the collection showing $30 owed, it shows last activity as 11/2010 on Experian... Equifax shows it as closed. I'm guessing they closed the account a couple years ago and never reported any additional information to Experian.

Re: Can I qualify for FHA?

Anonymous — Sun, 17 Mar 2013 20:55:23 GMT

I would apply with confidence before FHA changes.

Worse case you would have to lower your DTI or purchase a little less home price. But you will have an estimate for home value when pre approved.

Re: Can I qualify for FHA?

DallasLoanGuy — Mon, 18 Mar 2013 04:39:45 GMT

you are typically ok up to 49%

and up to 55% with 2 compensating factors.

FHA Compensating factors:

Borrower has successfully demonstrated the ability to pay housing expenses equal to or greater than the proposed monthly payment over the past 12 to24 months.
The borrower is making a large down payment (10% or more)
Borrower has demonstrated an ability to accumulate savings and a conservative attitude toward the use of credit.
Previous credit history shows that the borrower has the ability to devote a greater portion of the income to housing expense.
Borrower has documented income not being used in the effective income.
Minimal increase in the borrower’s housing expense.
The borrower has at least three months documented reserves after closing.
Borrower has potential for increased earnings.
Borrowers have relocated and spouse has not found employment, yet is expected to return to work based on prior history and work availability in the area.

Re: Can I qualify for FHA?

DallasLoanGuy — Mon, 18 Mar 2013 04:41:41 GMT

another little DTI trick is to refi a car loan.... BUT DON'T DO THAT until the loan officer sees your file

Re: Can I qualify for FHA?

tooleman694 — Mon, 18 Mar 2013 14:02:18 GMT

My DTI is in the 50s and we are fine.