I have a client that is wanting to buy a house. The income is good but would excede the debt ratio. The seller has agreed to pay the first years mortage payments, to be put in escrow. How would this work? Would I count this? I’ve never done anything like this before, and if it help they claim that wife will be going back to work in a few months and income will increse. Any ideas would be a huge help.


First Horizon will allow the seller to contribute 3-6 months interest on their full doc program. When you say their ratios are high have you considered a no-ratio program? The borrower will not have to list income. Also, when you say “high ratios” have you spoken with a mortgage professional or are you calculating them on your own? I have seen ratios in the low 60’s approved through DU. Hope this helps.

p.s. DU is the automatic underwriting system used by Fannie Mae

Your post do not give us enough to structure the deal to get funded. Where is the property? Single family house? Fico score? If you have to, how much can you put down?. No doc loan is possible base on fico. There is so many Full Doc, Stated wage earner, stated -self employed, siva, sisa, no ratio, no doc etc…

“wife will go back to work” means nothing to a traditional lender, not for a loan that your clients want today, anyway.

Here are some possible ideas:

  • add a co-signer or non-occupant borrower (that has income, of course)
  • buy a smaller house
  • buy a multi-family in order to use the rental income to help cover part of the mortgage, then convince them to upgrade to a single family with you in a year (after wife re-establishes work history), and keep the multi-unit as a rental for investment.