Fannie Mae to Raise DTI (debt to income) Ratio Threshold

July 19th, 2017

Many Conventional loans are underwritten via Fannie Mae’s automated underwriting engine. This engine will typically not currently “approve” an application (in most cases) if the DTI exceeds 45%, leaving a lot of potential home buyers having to seek alternatives. After extensive research, Fannie Mae is saying there is little to be concerned about in terms of additional risk/default by raising the threshold by 5%.

This is great news for otherwise credit worthy applicants who were “denied” simply for exceeding that 45% mark.

These changes are expected to be incorporated with Fannie Mae’s July 29, 2017 update.

https://www.housingwire.com/articles/40382-fannie-mae-raises-debt-to-income-ratio-to-further-expand-mortgage-lending

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