Has anyone else noticed a cap of 46% on the housing ratio for an FHA automated approval?  Debt ratio, credit, down payment and reserves don't seem to matter....

I haven't noticed any yet, but Flagstar just sent out a memo saying they would not go below 640 and max DTI will be 48% (even with a DU approval), along with some other stricter guidelines for gift money.

Jeff, like Scott I haven't encountered that probiem either, any chance you have a non-occupying co-borrower?

I have been getting Automated approvals up to 56%ish regularly...

He asked about the housing ratio, not the debt ratio exceeding 46%. Jeff I have encountered that issue several times in the last two months. While I've gotten approvals on several loans with 46%+ debt ratios all the way to 56%, I have yet to get an approval for an FHA loan over 46% on the HOUSING RATIO.

What I have seen is that the front end (housing ratio) has to be under 47%... 46.99% works.

Guess I was just using common sense, thank you Mike for clarifying. Why would anyone even try a 48% DTH ratio is beyone me. Maybe thats why we got into our current problems.  You might want to go back to the basics.

Most cases where my borrowers have higher debt to housing/income ratios are because there is income within the household that cannot be used to qualify. Often a spouse who has had a medical issue or divorce in their past may not qualify from a credit standpoint. However, the family obviously counts on their income to make ends meet.

So while I agree that one would not want to go it alone with those higher ratios, it is usually not the case.

Jason