Grh Debt Ratio Waiver Request / Payment Shock Form

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KS 11/05
GRH Debt Ratio Waiver Request / Payment Shock Form
Use whenever the PITI ratio is > 29.01% or TD ratio is > 41.01%; or Payment Shock is > 100%; or the applicant has no prior rental history;
and to document Compensating Factors whenever there is Risk Layering.
Rocky Mountain Mortgage Specialist
Lender:
Applicant:
_____________________________________
__________________________________________________________
Underwriter:
Middle Credit Score(s): Applicant
Co-Applicant
_____________________________________
1
________
1
________
%
%
PITI Ratio
Total Debt Ratio
__________
________
(New PITI: $
divided by former rent: $
) - 1 X 100 =
% Payment Shock
________
________
______
Note: Debt Ratio Waivers are not normally granted when payment shock > 100% or there is no prior history of rent payments.
STREAMLINED WAIVER - Check if applicable: The Middle Credit Score of the applicant is > 660 and (if applicable) co-applicant
is > 620; therefore, per current RD Administrative Notice, no further documentation is required for the Debt Ratio Waiver UNLESS
there is also payment shock or other risk layering present.
Other Compensating Factors – Check only those that apply (must have at least 2-3). The applicant:
1. Rent for the past 12 months is similar to the new PITI and/or accumulated savings that when added to the former rent shows
capacity to repay the new PITI.
2. Minimal increase in the applicants housing expense.
3. Good credit history, reflected by the Applicant Middle Credit Score of 660 or higher.
4. Co-Applicant has a Middle Credit Score (MCS) of 660 or higher.
5. Has demonstrated a conservative attitude toward the use of credit and the ability to accumulate savings.
6. Stable employment for the past two years, demonstrating dependable income.
7. Potential for increased earnings, indicated by job training or education in the applicant’s profession.
8. Will have substantial cash reserves after all closing costs and fees are paid. Amount = $
.
__________
9. Has income and/or benefits of approx. $
per month not reflected in repayment income but indirectly supports mortgage
________
repayment, such as income from a non-applicant spouse, food stamps or other public assistance.
10. Purchasing a home as a result of relocation of the primary wage-earner and the secondary wage earner has an established
history of employment, is expected to return to work, and there are reasonable job prospects and potential for securing
employment in a similar profession in the new area.
11. Low TD ratio, which by itself does not compensate for a high PITI; but because other strong compensating factors are present
as checked above, it is viewed as a positive mitigating factor.
12. Other:
1
all Waivers where the applicant’s Middle Credit Score is < 660 OR the co-applicant’s is < 620, OR there is no Credit
For
Score, documentation which supports the above must be attached/submitted to USDA Rural Development.
As the Underwriter, I hereby approve of the proposed ratios. Loan approval will be subject to all other underwriting conditions of both
USDA Rural Development and myself. I understand that it is my responsibility to determine that the ratios are reasonable based on the
above listed factors. I am the primary decision-maker in regard to accepting the proposed ratios, subject to Agency concurrence.
Underwriter
Underwriter: _________________________________________________________________________
Date: ___________________
Signature
Title
USDA Rural Development: _____________________________________________________________
Date: ___________________
Signature
Title

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