Buying a fourplex using the FHA loan: is now good time?

[Anthony Barbato]

Hello,

On January 30th of 2020 I am going to buy my first fourplex using an FHA loan. I spoke with a loan officer today and she had mentioned how the Federal Housing Authority was tightening up the requirements on FHA loans. Specifically, the Desktop Underwriter program is no longer approving applicants with 55% DTI, whereas before, it was possible. 50% is now the conservative estimate that I can expect to qualify for.

I am curious what changes are occurring, and if the requirements are becoming tighter on FHA loans, what is prompting the change?

Thank you

[Chris Mason]

You shouldn't be buying a home with a 55% DTI anyways, to be honest.... that's insane, I don't care what the guidelines say.

You make $5000/mo gross, between rent and dayjob.

$2750 goes to PITI, leaving you with $2250.

25% of $5k goes to taxes, now you're at $1000 to live on.

$400/mo goes to your 401k/IRA, now you're down to $600 per month.

$250 car payment, now you're at $350/mo to live on...

...we know how that plays out.