buyer with debt to income problem

[Don Chambers]

I had a pre-approved buyer for my fix and flip. then his loan was denied because he didn't disclose child support payments on the initial application. I assume it's a debt to income issue. Any ideas how I can salvage this? How do the lender rules vary on this?

[Chris Mason]

Originally posted by @Don Chambers:

I had a pre-approved buyer for my fix and flip. then his loan was denied because he didn't disclose child support payments on the initial application. I assume it's a debt to income issue.

Any ideas how I can salvage this? How do the lender rules vary on this?

 Lender rules do not vary on this one. It's a court order; my underwriter can't exactly override a judge. LO should have caught it upfront. 

Buyer may be able to pay off other debt to qualify. Sometimes turning 10% down into [ 5% down + pay off the car ] does the trick.

Another option is to switch it from conventional to FHA, which often allows higher DTI. Will require a new appraisal.

In general (in my state at least), child support only ever appears on credit reports or paystubs if dad was a slacker and didn't pay his child support, resulting in a judge having to get re-involved. Dads, stop being slackers!