Installment debt with less than 10 months remaining could be excluded from the DTI calculation.
Paying off installment and revolving debt to qualify IS allowed.
USDA has strict DTI guidelines which dictate ratios for both housing as well as the total debt ratio.
The target housing ratio is 29%
The target total debt to income ratio is 41%
Buyers with credit scores over 680 who also have compensating factors are allowed higher ratios
32% for housing
44% for total DTI.
This overview is not all inclusive and does not include all guidelines or potential qualifying situations. Contact us or your lender for additional information that applies to your situation.