Down Payment and Qualifying Ratio Requirements for Manually Underwritten Loans
For manually underwritten loans, if the income of a guarantor, co-signer, or non-occupant borrower is used for qualifying purposes, the occupying borrower(s) must make the first 5% of the down payment from their own funds unless:
- the LTV or CLTV ratio is less than or equal to 80%; or
- the occupying borrower is purchasing a one-unit principal residence and meets the requirements to use gifts, donated grant funds, or funds received from an employer to pay for some or all of the borrower’s minimum contribution. See B3-4.3-04, Personal Gifts; B3-4.3-06, Donations From Entities; and B3-4.3-08, Employer Assistance, for additional information.
Using only the income of the occupying borrower(s) to calculate the DTI ratio, the maximum allowable DTI ratio is 43%.
For additional information, see B2-2-04, Guarantors, Co-Signers, or Non-Occupant Borrowers on the Subject Transaction.