Developer · San Francisco · Member since 2018 · 53 posts · 9 votes
Hello,
On January 30th of 2020 I am going to buy my first fourplex using an FHA loan. I spoke with a loan officer today and she had mentioned how the Federal Housing Authority was tightening up the requirements on FHA loans. Specifically, the Desktop Underwriter program is no longer approving applicants with 55% DTI, whereas before, it was possible. 50% is now the conservative estimate that I can expect to qualify for.
I am curious what changes are occurring, and if the requirements are becoming tighter on FHA loans, what is prompting the change?
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
7y
@Anthony Barbato the reality is that there is never a bad time to buy a good deal. Don't obsess over a 4 unit though. A lot of my clients from BP tell me they want to house hack a 4 unit, but a lot of this depends on your area. Most of the inventory tends to be three units in my markets in Berwyn and Cicero. I would rather buy a great three unit than an over priced four unit.
Lender · Chicago, IL · Member since 2015 · 67 posts · 43 votes
7y
The changes are directed towards borrowers with a combination of a lower credit score and higher debt ratio. If you have a 700+ fico and a 55% back end DTI, I think you'll still qualify. Their concern seems to be FICOs lower than 620 with higher debt ratios. Here is a good article from the Washington Post: