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FHA Loan Answers: Child Support and Debt-To-Income Ratios

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A reader asks, “What about Child Support? My mortgage broker said that if it doesn’t come up on credit report it will not count as a deduction. However it does reflect on my paycheck every 2 weeks. My question is this considered a voluntary deduction at that point or was I misinformed?”

FHA loan rules require a borrower’s debt-to-income ratio to be within certain limits in order to qualify for an FHA home loan, and while it’s true that FHA rules do take compensating factors into account, the amount the borrower is obligated to pay every month before the mortgage amount is important.

What do the rules say about debt such as child support, alimony, etc.?

The FHA official site says, “Most recurring obligations, including child support and alimony are considered in computing debt-to-income ratios.

Debts lasting less than ten months must be counted if the amount of the debt affects the borrower’s ability to make the mortgage payment during the months immediately after loan closing; this is especially true if the borrower will have limited or no cash assets after loan closing.”

This information is found in one of the FHA’s many frequently asked questions lists, which also adds, “Because of the tax consequences of alimony payments, the lender may choose to treat the monthly alimony obligation as a reduction from the borrower’s gross income in calculating qualifying ratios, rather than as a monthly obligation.”

The lender’s standards may play a part in how these types of debts are calculated or reviewed, but there are also federal laws such as the Fair Housing Act and other standards that may apply depending on the situation. In cases where there is doubt, it’s best to contact the FHA directly to inquire how the rules may apply in your specific situation. Contact the FHA at 1-800 CALL FHA for more information.

Do you have questions about FHA mortgages? Ask us in the comments section.

4 Responses to FHA Loan Answers: Child Support and Debt-To-Income Ratios

  1. Thuy says:

    In general, I have heard that if a borrower has an installment debt of less than 10 months, it will not count.

    Does FHA rules indicate what type of debts of less than 10 months payments must be included when calculating qualifying ratios?

    For examples, child support, alimony, car loan of less than 10 months to go must be used to compute debt to income ratios?

    • Joe Wallace says:

      The answer may depend on the lender. Have you discussed the situation with a loan officer? Ask about the bank’s policies in this area–the FHA has minimum standards but the lender may have more strict requirements depending on the issue.

  2. Adrian Rivera says:

    For about a year now I have been seperate from my wife and had a new case come about for child support. I have been struggling to make my Mortgage payment on time and sometimes am left broke because I dont want to loose my Double Wide Mobil Home. Is there any help out there for me to not loose my home and try to figure out a way to make my payment on time. Thanks

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