USDA Program

Debit Ratio

Debt ratio waivers may be requested for loans with ratios exceeding program guidelines of 29/41 when compensating factors are present in the file. Applicants with credit scores of 660 and higher do not require additional compensating factors to be identified for debt ratio waiver requests. If co-applicants have a credit score of 659 or below, additional compensating factors should be documented to further support the ratio waiver request. There is no minimum credit score required to be eligible for a debt ratio waiver request. Compensating factors include, but are not limited to, the following:

*Credit score of 660 or higher for any applicant

*Cash reserves after closing

*Potential for increased earnings and career advancement\

*Similar housing expenditure

*Conservative use of credit

Additional compensation not included in qualifying income, such as part time job income that lacks a stable job history, potential bonus or commission income from a job.

Low total obligation ratio. (A low total obligation ratio does not compensate for a high PITI ratio; however, when other strong compensating factors are present a low total obligation ratio should be viewed as a positive mitigating factor.

Debt ratio waiver requests are submitted by the lender in writing with the complete submission package

For More Information Please Call 877-799-USDA (8732)

For More Information Please Call 877-799-USDA (8732)