Qualifying for a mortgage when you pay alimony

Recently Fannie Mae and Freddie Mac updated their guidelines to treat alimony payments the same way that FHA has.

With conforming mortgages (Fannie/Freddie) where there is more than 10 months remaining for alimony payments, Fannie Mae and Freddie Mac will allow the alimony to be deducted from gross income instead of being treated as a monthly debt. This often dramatically improves debt-to-income ratios.

If there is less than 10 months remaining on the alimony to be paid, then the lender does not have to factor in the alimony payments in the debt to income ratios.

This is subject to the lender’s underwriter approval as they may have their own overlays.

It’s good news for those who were stuck having to go FHA when they have alimony payments.

If I can help you with a home purchase or refinance on a property located anywhere in Washington state, please contact me!