In 2022 I posted an Oregon specific FHA loan calculator that showed an estimated monthly payment and qualifying income, including income required IF the household had "compensating factors".
I have updated that with a NEW FHA Feb 2023 Oregon Loan Estimator HERE.
The first worksheet has a total of 7 required variable inputs and it returns more than 20 values for each of the four loan scenarios. (Because each loan scenario has differing allowable loan ratios for housing expense and total reoccurring expenses, the qualifying income for each scenario differs).
The worksheet incorporates the just announced reduction in monthly MIP rate, FY 2023 FHA mortgage limits, and the FY 2022 income limits (due for updating in May). User selection of their county results in the automatic calculation of the proper limits for that county.
A second worksheet includes a link to the HUD compensating factors portion of the FHA Single Family Policy Guide and a one page summary extracted from the Guide. Note that the guidance applies to manual underwriting; automated underwriting systems may (or may not) incorporate some or all of this guidance.
Some observations for a Portland metro $400,000 sales price at 6% interest, 3.5% down, and $300 monthly other debt payments.
- With NO compensating factors an income of $117,400 would be required. That's 122% of the current HUD Portland MFI of $106,500.
- With 1 or more compensating factors the income required could drop to as low as $91,000, 22% BELOW the income required if the borrower has no compensating factors. $91,000 is 95% of the current MFI of $106,500. (Note that credit scores of 580+ are required for the three compensating factor scenarios).
NOTE that per an earlier post I projected that Portland metro MFI will soon increase to $114,400--if accurate, come May this would REDUCE the share of MFI required to qualify from the current 122% and 95%.
Originally created and posted on the Oregon Housing Blog.
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