Wednesday, July 24, 2013

Exceptions: How to Qualify for an FHA Loan With High Debt Levels

Exceptions: How to Qualify for an FHA Loan With High Debt Levels


I’ve been speaking in general terms. Let’s get specific. Here is what HUD Handbook 4155.1 says about the two types of debt ratios:
  • Front end: “The relationship of the mortgage payment to income [known as the front-end debt-to-income ratio] is considered acceptable if the total mortgage payment does not exceed 31% of the gross effective income.”
  • Back end: “The relationship of total obligations to income [known as the back-end debt-to-income ratio] is considered acceptable if the total mortgage payment and all recurring monthly obligations do not exceed 43% of the gross effective income.”
Source: HUD Handbook 4155.1, Chapter 4, Section F, “Borrower Qualifying Ratios”


Read more: http://www.homebuyinginstitute.com/news/fha-with-high-debt-level-431/#ixzz2Zyd7p4wS



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