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Whats the highest acceptable DTI for an FHA loan?

by HSPlinkett from Red Bank, New Jersey. Dec 7th 2012 Reply


William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,728 contributions

It's whatever the automated system approves... I have seen it approve borrowers up to 56% to 58%.. However FHA does not lend money.. They only insure loans.. so the lenders often have their own overlays which limit the DTI to say 46% or 50%... I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Dec 7th 2012
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Bert Carpenter (BertCarpenter)
#1 ranked lender in Arizona - 2,406 contributions

There is no theoretical maximum, but typically, AUS tops out around 52-55%. I once had an AUS approval for a conventional loan that topped out at 73%. But that was in 2001 and things are way different today. In the last 3 years I haven't seen anything above 55% for FHA. Depending on your other factors, LTV, reserves, employment history, credit score, your top DTI could be a lot lower.~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ Licensed in California and Arizona ~ NMLS 40586 ~ www.LoansA2z.com ~ 888-889-9950

Dec 8th 2012
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Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,249 contributions

Depending on qualifications I've seen approvals up to about 55% in the past year, and higher may be possible but rare. However, many lenders have internal requirements limiting the maximum to a lower % such as 50% or even less for lower scores.

Dec 7th 2012
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Carlo Sanchez (MortgageLendingPro)
#0 ranked lender in Utah - 1,163 contributions

I have had as high as 57% get approved and have have them as low as 41% not get approved. Also keep in mind that each investor has their own Overlay which will limit what risk they are willing to take on. All loans need to get Approval from an Automated Underwriting system and it takes your whole file into account in regards to if you will recieve and approval or not. If the Denial is because of DTI then your dead in the water until you get them down. If you get an Approval but the lender can't do the loan, then find another lender that will. There will be plenty of loan officers on this website that can help you and stay away from the big banks as their guidelines are more restrictive.

Dec 7th 2012
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Shon Atabaki (ShonAtabaki)
#49 ranked lender in Washington - 95 contributions

2 sided answer. For an FHA purchase, If your lender can get your aproved through a Fanne Mae or Freddie Mac automated underwriting system, then you can go as high as the underwriting software will approve, (which I've typically seen in the mid 50%'s). However if your situation has unique attributes that might require your loan to be manually underwritten by a delegated FHA underwriter as opposed to running through automated underwriting, then there is usually a strict 31/43% ratio ceiling.

Dec 7th 2012
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Jesse Olson (jesseolson)
#657 ranked lender in California - 37 contributions

Typically, the cutoff ratio's have been 47% top and 54% bottom but there are other factors involved as mentioned by other Loan Officers such as overlays, desktop underwriting by receiving "approve/eligible" which have been seen higher than 47/54. One reason you may get approved higher than 47/54 is because of higher cash reserves. I'm licensed in the state of NJ and I would be happy to look at your situation. Our experience has helped us get qualifying ratios lower when borrowers have been declined elsewhere. Please feel free to call me at 949.491.8607 or email me at jolson@afnmortgagelenders.com, thank you.

Dec 7th 2012
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