Is FHA More Lenient About DTI When Using Cosigner Than Conventional?

[Burt L.]

I will be seeking either a 3% Conventional or 3.5% FHA loan. Credit is at 715-720 (720 is much better) but I will have a high DTI and can obtain a family cosigner with significant income and low debt.

My understanding is that FHA doesn't set the loan rates, but a FHA lender does and assesses the loan risk. I suspect that a conventional lender would be quicker to put me in a high risk category even with a cosigner and that an FHA lender would have to follow guildelines and would be more lenient on the "combined" DTI of myself and the cosigner - as a Conventilonal lender can have their own overlays, so to speak.

The permanent PMI isn't so attractive with an FHA loan. Is there any known difference on how Conventional treats DTI with a cosigner vs FHA. Conventional may not even allow a cosigner, for all I know. Thank you.