“HomeReady recognizes the growth of extended-income households by allowing the existence of non-borrower income to be considered a compensating factor in Desktop Underwriter® (DU®). HomeReady permits the borrower to have a higher debt-to-income (DTI) ratio – higher than 45%, up to 50% – considering available household income to provide additional assistance with household expenses if needed. This flexibility not only provides access to mortgage credit for additional creditworthy borrowers, but also may provide a meaningful marketing opportunity for lenders.”
Non-borrower household income requirements
Non-borrower household income must be underwritten in DU.
Non-borrower income must be at least 30 percent of the total monthly qualifying income being used by the borrower(s). (Note: Income from more than one non-borrower household member may be considered.) Non-borrower income is not considered part of qualifying income.
Non-borrower household members may be relatives or non-relatives, including a spouse who is not on the loan. The non-borrower must 1) document his or her income, and 2) sign a statement of intent to reside with the borrower(s) for a minimum of 12 months