Loan Requirements
Max DTI
Maximum DTI limits vary significantly by program, loan type, and lender overlay — ranging from 36% (Fannie Mae manual UW baseline) to 65% (VA and Refi Now/Refi Possible programs), with several Non-QM programs offering expanded tiers up to 55% under defined conditions.
Agency Guideline Requirements
Fannie Mae:
- Manual UW: "Fannie Mae's maximum total DTI ratio is 36% of the borrower's stable monthly income. The maximum can be exceeded up to 45% if the borrower meets the credit score and reserve requirements reflected in the Eligibility Matrix."
- DU: "The maximum allowable DTI ratio is 50%."
Freddie Mac:
- Manual UW: DTI should not exceed 36%; "if the Borrower's monthly DTI ratio exceeds 45%, the Mortgage is ineligible for sale to Freddie Mac."
- LPA: DTI determined by Loan Product Advisor.
Conventional — Lender Overlays
- Mega Capital — DU Conforming/Agency: DU determines the maximum allowable DTI based on overall risk assessment; no fixed overlay cap beyond DU findings stated.
- AmWest — AUS Jumbo Express: "Maximum DTI of 50.00% with an AUS approve/accept is eligible for the following: Primary residence, Maximum CLTV 80.00%, Maximum loan amount $2,000,000. Scenarios not meeting the above criteria have a maximum DTI of 45.00% with an AUS approve/accept."
Refi Now / Refi Possible Programs
- Nations Direct — Refi Possible (Freddie Mac) and Refi Now (Fannie Mae): Max DTI 65% for both programs.
- Mega Capital — Refi Possible (Freddie Mac): "The total monthly DTI ratio must be less than or equal to 65%."
FHA — Lender Overlays
- JMAC Lending — FHA Standard and High Balance: FICO 500/580+: Manual UW 31%/43%; AUS 46.99%/50%.
- Nations Direct — AXIS FHA: Manual UW max DTI 45% with minimum 660 FICO; AUS subject to AUS findings.
- Forward Lending — FHA:
- AUS (FICO ≥ 580): Follow AUS approve/accept findings.
- Manual UW (FICO ≥ 580): Up to 40%/50% with two compensating factors.
- Forward Lending — CalHFA/CalPLUS FHA (California only):
- FICO 640: Max 45% DTI (AUS); FICO 700: Max 50% DTI (AUS).
- Manual UW with FICO 660: Max 43% DTI.
VA — Lender Overlays
Forward Lending — VA:
- Fixed Rate, AUS Approve/Accept: 65% (above 65% requires Credit Policy 2nd-level review).
- Manual UW with FICO 580: 50%; Manual UW with No FICO: 45%.
- ARM (DU only), loan ≤ $1.5M: Per AUS with max 65%.
- ARM Manual UW: 45%.
Non-QM / Alt-Doc Programs — Lender Overlays
- Nations Direct — Ignite Full Doc: Standard max 50%; expanded up to 55% with min 700 FICO, max 80% LTV/CLTV, Primary Residence only, Purchase or R&T only, max loan $1,500,000, no 40-year IO.
- Nations Direct — Ignite Bank Statements: Same structure: standard max 50%; expanded up to 55% with min 700 FICO, max 80% LTV/CLTV, Primary only, Purchase or R&T, max $1.5M loan, no 40-year IO.
- Nations Direct — Ignite 1099: Max DTI 50%; expanded DTI not available on the 1099 program.
- Nations Direct — Ignite P&L Only: Max DTI 50%; DTI > 43% requires residual income of $2,500 plus $150 per dependent.
- Nations Direct — NDM NonQM (Full Doc / 1099 / Bank Statements / P&L): "The maximum DTI can be found on the Product Matrices." Residual income of $1,500 required if DTI is over 43%.
- New Wave Lending — A-QM Self-Employed (Bank Statement / 1099): Standard max 50%; exception tier 55% with FICO ≥ 680, loan ≤ $1.5M, LTV per matrix, plus 3 months additional reserves, no asset depletion income.
- JMAC Lending — ZUMA Prime Non-Conforming (Asset Utilization): "DTI limits: First time homebuyer (FTHB): 45% | Less than 12-month housing history: 43%."
- AD Mortgage — Non-QM: Back-end DTI of 55% for Super Prime/Prime borrowers; 43% for Foreign National borrowers.
- Mega Capital — Simple MVP (Non-QM Alt Doc): Maximum DTI per program matrix; HPML residual income applies by household size.
HELOC / Second Mortgage — Lender Overlays
- AmWest — Alt-Doc HELOC: "Max DTI: 49% on all Income Doc Types (excluding DSCR, No Ratio, and No Income doc types). DTI calculation must include the 1st lien payment of the subject property."
- AmWest — Full Doc Closed End Second (CES): Max DTI 50%; DTI calculation must include the 1st lien payment of the subject property.
- Forward Lending — HELOC: 1-Unit max DTI 50%; 2–4 Units max DTI 45%; FICO 600–639 max DTI 45%.
Quick Reference Summary
| Program / Lender | Max DTI | Key Conditions |
|---|---|---|
| Fannie Mae — Manual UW | 36% / up to 45% | Compensating factors required above 36% |
| Fannie Mae — DU | 50% | Per DU findings |
| Freddie Mac — Manual UW | 45% hard cap | Ineligible for sale above 45% |
| Freddie Mac — LPA | Per LPA | |
| AmWest AUS Jumbo Express | 50% / 45% | 50%: primary, ≤80% CLTV, ≤$2M; else 45% |
| Nations Direct — Refi Now / Refi Possible | 65% | |
| Mega Capital — Refi Possible | 65% | |
| JMAC FHA (AUS) | 50% | 46.99%/50% front/back split |
| Nations Direct AXIS FHA (manual) | 45% | Min 660 FICO required |
| Forward Lending FHA (manual) | Up to 40%/50% | Two compensating factors required |
| Forward Lending VA (fixed, AUS) | 65% | Above 65% requires 2nd-level review |
| Forward Lending VA (manual, 580 FICO) | 50% | |
| Nations Direct Ignite Full Doc / Bank Statements | 50% / 55% expanded | 55%: min 700 FICO, primary, ≤$1.5M, 80% LTV |
| Nations Direct Ignite 1099 | 50% | No expanded DTI available |
| New Wave Lending A-QM | 50% / 55% expanded | 55%: FICO ≥680, ≤$1.5M, +3 mo reserves |
| AD Mortgage Non-QM | 55% / 43% | 55% Super/Prime; 43% Foreign National |
| AmWest Alt-Doc HELOC | 49% | Excludes DSCR, No Ratio, No Income types |
| AmWest CES Full Doc | 50% | Includes 1st lien payment in DTI calc |
| Forward Lending HELOC | 50% (1-unit) / 45% (2–4 units) | 45% if FICO 600–639 |
