This client didn’t qualify for her bank’s down payment assistance program. She needed to find a way to reduce her monthly housing obligation.
The Situation
“G” was referred to me by her bank loan officer after reviewing her file, where he discovered that her debt ratios and credit scores did not fall within the bank’s guideline requirements.
She had two sources of income, and her Mom was willing to go in together to include her social security income.
Both she and her Mom had monthly rent obligations that were becoming too high manage individually.
Why it Broke
Down payment assistance options were limited under standard programs given the borrower’s profile.
G’s second job could not be used due to seasoning requirements, resulting in a higher DTI than would work for most programs.
Evaluated individually, neither household could efficiently reduce housing costs despite strong payment history.
The Fix
We evaluated the borrower and her mother as a joint purchase, combining qualifying income and household needs. We used an FHA loan with Chenoa down payment assistance and seller concessions to allow for a true zero-down transaction with a 51% qualifying back-end DTI.
I introduced them to a Realtor, and after several months of searching, they identified a suitable property.
The Realtor negotiated repairs to the furnace prior to closing, reducing the risk of near-term unexpected expenses.
The Lesson
Combining two households can often help make the numbers work.
The Takeaway
Restructuring the “qualifying household” + finding the right DPA program may solve affordability challenges.
Work with Me
Do you have a deal that doesn’t work internally?
Reply to this email with the scenario and I’ll take a thoughtful second look.
Or call me directly at 616.298.2743
You’re receiving this because we’ve connected professionally around complex lending or structuring scenarios that required a second look.