source:
  type: regulation
  id: fhlmc-5401.2
  authority: Freddie Mac Single-Family Seller/Servicer Guide §5401.2 — Monthly debt payment-to-income (DTI) ratio
    (04/01/26)
  description: "Freddie Mac Guide §5401.2 (Monthly debt payment-to-income (DTI) ratio). Gap-fill (verbatim, ID-diff).\
    \ \n"
obligations:
- id: fhlmc-5401.2-0
  canonical_id: fhlmc-5401.2-0
  section: Freddie Mac Guide 5401.2
  description: '5401.2 Monthly debt payment-to-income (DTI) ratio: 401-6 ■ General requirements ■ Liabilities included
    in the monthly debt payment-to-income (DTI) ratio ■ Liabilities that may be excluded from the monthly DTI ratio
    ■ Evaluating debt ratios The DTI ratio is determined by dividing the total of the Borrower’s monthly housing
    expense…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §5401.2 — Monthly debt payment-to-income (DTI) ratio
      (04/01/26)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '401-6 ■ General requirements ■ Liabilities included in the monthly debt payment-to-income
      (DTI) ratio ■ Liabilities that may be excluded from the monthly DTI ratio ■ Evaluating debt ratios The DTI
      ratio is determined by dividing the total of the Borrower’s monthly housing expense described in Section 5401.1(a)
      plus all monthly payments on the Borrower’s liabilities described in Section 5401.2(b) by the Borrower’s stable
      monthly income and/or qualifying asset amount as described in Section 5307.1(b). (a) General requirements
      (i) Consideration of liabilities The Borrower’s liabilities must be reflected on the Mortgage application
      (Form 65, Uniform Residential Loan Application) and considered when qualifying the Borrower. Sellers must
      review the Mortgage application, credit report, Borrower’s paystubs (if provided) and other file documentation
      for Borrower liabilities. All of the Borrower’s debts incurred through the Note Date must be considered when
      qualifying the Borrower. (ii) Debt pay offs and pay downs When the Borrower pays off or pays down an existing
      debt to qualify for the Mortgage, the Seller must document the source of funds used. The source of funds must
      meet the asset eligibility and documentation requirements in Sections 5501.3 and 5501.4. (b) Liabilities included
      in the monthly DTI ratio Documentation of all monthly payment amounts for the following liabilities must be
      included in the Mortgage file, and the monthly payment amount must be included in the DTI ratio: 1. Monthly
      housing expense (see Section 5401.1) 2. Payments on all installment debts with more than 10 months of payments
      remaining, including debts that are in a period of either deferment or forbearance. Installment debt may be
      excluded if the information on the credit report or other Mortgage file documentation verifies that there
      are 10 or fewer months of payments remaining.'
    drafter_attestation: Verbatim from Freddie Guide §5401.2 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-5401.2-1
  canonical_id: fhlmc-5401.2-1
  section: Freddie Mac Guide 5401.2
  description: '5401.2 Monthly debt payment-to-income (DTI) ratio: 401-7 (i) Student loans For student loans, the
    Seller must comply with the requirements in the table below. Requirements for student loans Student loans in
    deferment, forbearance or repayment, including income-driven repayment plans Student loan forgiveness, cancelation,
    discharg…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §5401.2 — Monthly debt payment-to-income (DTI) ratio
      (04/01/26)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '401-7 (i) Student loans For student loans, the Seller must comply with the requirements in
      the table below. Requirements for student loans Student loans in deferment, forbearance or repayment, including
      income-driven repayment plans Student loan forgiveness, cancelation, discharge and employment-contingent repayment
      programs In all cases, an amount greater than zero must be included in the monthly DTI ratio for all student
      loans, as described below: ■ If the current monthly payment amount reported on the credit report is greater
      than zero, the Seller must use the amount reported on the credit report, unless other documentation in the
      Mortgage file supports a different current payment amount greater than zero, or ■ If the current monthly payment
      amount reported on the credit report is zero, the Seller must use 0.5% of the outstanding loan balance, as
      reported on the credit report, unless other documentation in the Mortgage file supports a different current
      payment amount greater than zero For student loans in income-driven repayment plans when documentation in
      the Mortgage file indicates that prior to or on the first Mortgage payment Due Date the Borrower must recertify
      their income and/or that the Borrower’s payment will increase the Seller may not use the monthly payment amount
      described above in calculating the DTI ratio and must instead use: The student loan payment may be excluded
      from the monthly DTI ratio provided the Mortgage file contains documentation that indicates the Borrower is
      eligible or approved, as applicable, for the student loan forgiveness, cancelation, discharge or employment-contingent
      repayment program, and the Seller is not aware of any circumstances that will make the Borrower ineligible
      in the future. Evidence of eligibility or approval must come from the student loan program or the employer,
      as applicable. Additionally, the Mortgage file documentation must indicate: ■ There are 10 or fewer monthly
      payments remaining until the full balance of the student loan is forgiven, canceled, discharged or in the
      case of an employment- contingent repayment program, paid, or ■ The monthly payment is deferred or is in forbearance
      and the full balance of the student loan will be forgiven, canceled, discharged or in the case of an employment-
      contingent repayment program, paid, at the end of the deferment or forbearance period'
    drafter_attestation: Verbatim from Freddie Guide §5401.2 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-5401.2-2
  canonical_id: fhlmc-5401.2-2
  section: Freddie Mac Guide 5401.2
  description: '5401.2 Monthly debt payment-to-income (DTI) ratio: 401-8 Requirements for student loans Student
    loans in deferment, forbearance or repayment, including income-driven repayment plans Student loan forgiveness,
    cancelation, discharge and employment-contingent repayment programs ■ The greater of the current payment amount
    or 0.5% of …'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §5401.2 — Monthly debt payment-to-income (DTI) ratio
      (04/01/26)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '401-8 Requirements for student loans Student loans in deferment, forbearance or repayment,
      including income-driven repayment plans Student loan forgiveness, cancelation, discharge and employment-contingent
      repayment programs ■ The greater of the current payment amount or 0.5% of the outstanding loan balance, or
      ■ The documented future payment amount if greater than the current payment amount, or ■ The future payment
      amount that is less than or equal to the current payment amount, provided that the Mortgage file contains
      documentation that the Borrower has recertified their income and the future payment amount has been approved.
      The future payment amount must be greater than zero. (ii) Internal Revenue Service (IRS) installment agreements
      For IRS installment agreements, the Seller must comply with the requirements in the table below. Requirements
      for IRS installment agreements Approved IRS installment agreements Installment agreements pending IRS approval
      When the Borrower is obligated on an installment agreement approved by the IRS for payment of past-due federal
      taxes, all of the following requirements must be met: ■ The Seller must obtain and retain in the Mortgage
      file a copy of the installment agreement approved by the IRS reflecting the payment terms and verifying the
      monthly payment amount and balance When the Borrower has applied for an installment agreement with the IRS
      that is pending IRS approval, all of the following requirements must be met: ■ A copy of the application for
      the installment agreement reflecting the amount of taxes owed and requested payment terms must be included
      in the Mortgage file ■ The greater of the monthly payment amount requested by the Borrower'
    drafter_attestation: Verbatim from Freddie Guide §5401.2 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-5401.2-3
  canonical_id: fhlmc-5401.2-3
  section: Freddie Mac Guide 5401.2
  description: '5401.2 Monthly debt payment-to-income (DTI) ratio: 401-9 Requirements for IRS installment agreements
    Approved IRS installment agreements Installment agreements pending IRS approval ■ The monthly payment must be
    included in the Borrower’s DTI ratio if there are more than 10 months of payments remaining ■ The Seller must
    document i…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §5401.2 — Monthly debt payment-to-income (DTI) ratio
      (04/01/26)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '401-9 Requirements for IRS installment agreements Approved IRS installment agreements Installment
      agreements pending IRS approval ■ The monthly payment must be included in the Borrower’s DTI ratio if there
      are more than 10 months of payments remaining ■ The Seller must document in the Mortgage file that the Borrower
      is not past due under the terms of the installment agreement or the amount of taxes owed divided by 72 must
      be included in the Borrower’s monthly DTI ratio There must be no indication, and the Seller must have no knowledge,
      that the IRS has filed a Notice of Federal Tax Lien for the taxes owed by the Borrower. (iii) Timeshare loans
      Timeshare loans are considered installment debts, regardless of how they are reported on the Borrower’s credit
      report. Associated maintenance fees are not required to be included in the monthly DTI ratio. (iv) Other installment
      debt For other installment debts not reported on the credit report, or listed as deferred or in forbearance,
      the Seller must maintain in the Mortgage file documentation verifying the monthly payment amount. 3. Alimony
      or maintenance payments with more than 10 months of payments remaining The monthly payment amount must be
      documented in the Mortgage file with a copy of the signed court order, legally binding separation agreement
      and/or final divorce decree or equivalent documentation. Instead of including these payments in the calculation
      of the debt, they must be deducted from the Borrower’s stable monthly income, and the reduced stable monthly
      income must be used to qualify the Borrower. When entering an alimony obligation in Loan Product Advisor,
      select “Alimony” under “Income Type” and enter it as a negative number. If the Borrower also receives alimony
      income, select “Alimony” under “Income Type” and enter the amount received. Note: If the Mortgage file documentation
      supports that there are 10 or fewer months of payments remaining, the payment may be omitted from the DTI
      ratio.'
    drafter_attestation: Verbatim from Freddie Guide §5401.2 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-5401.2-4
  canonical_id: fhlmc-5401.2-4
  section: Freddie Mac Guide 5401.2
  description: '5401.2 Monthly debt payment-to-income (DTI) ratio: 401-10 4. Child support payments with more than
    10 months of payments remaining The monthly payment amount must be documented with a copy of the signed court
    order, legally binding separation agreement and/or final divorce decree or equivalent documentation. Note: If
    the Mortgage…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §5401.2 — Monthly debt payment-to-income (DTI) ratio
      (04/01/26)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '401-10 4. Child support payments with more than 10 months of payments remaining The monthly
      payment amount must be documented with a copy of the signed court order, legally binding separation agreement
      and/or final divorce decree or equivalent documentation. Note: If the Mortgage file documentation supports
      that there are 10 or fewer months of payments remaining, the payment may be omitted from the DTI ratio. 5.
      Monthly payments on revolving or 30-day accounts (i) Revolving accounts If there is no monthly payment reported
      on the credit report and no documentation in the Mortgage file indicating the monthly payment amount, 5% of
      the outstanding balance will be considered the required monthly payment. (ii) 30-day accounts For 30-day accounts
      (i.e., accounts that require the balance to be paid in full monthly), the Seller must include the full amount
      of the outstanding account balance in the DTI ratio. Exception: The debt may be excluded if the Borrower has
      sufficient funds to pay off the outstanding account balance. These funds must be verified, in addition to
      any funds used to qualify the Borrower for the Mortgage transaction, and the source of funds must be an eligible
      source as described in Chapter 5501. (iii) Authorized user accounts When a Borrower is not the primary account
      holder but is an authorized user on a revolving or 30-day account, the monthly payment, as reported on the
      credit report, must be included in the DTI ratio only if the Seller is required by Section 5202.1(c) for Manually
      Underwritten Mortgages to include in the Mortgage file documentation evidencing that the Borrower has been
      making the payments on the account for the last 12 months. 6. Monthly lease payments regardless of the number
      of payments remaining When a lease is paid down, the monthly lease payment must be included in the DTI ratio.
      For an automobile lease, when the remaining balance is paid off/prepaid, the monthly lease payment may be
      excluded from the DTI ratio.'
    drafter_attestation: Verbatim from Freddie Guide §5401.2 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-5401.2-5
  canonical_id: fhlmc-5401.2-5
  section: Freddie Mac Guide 5401.2
  description: '5401.2 Monthly debt payment-to-income (DTI) ratio: 401-11 Refer to Section 5401.2(c)(vi) below for
    requirements when payments for solar panels subject to a lease agreement, power purchase agreement (PPA) or
    similar type of agreement may be excluded from the DTI ratio. 7. Monthly payment amounts for properties for
    which rental inc…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §5401.2 — Monthly debt payment-to-income (DTI) ratio
      (04/01/26)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '401-11 Refer to Section 5401.2(c)(vi) below for requirements when payments for solar panels
      subject to a lease agreement, power purchase agreement (PPA) or similar type of agreement may be excluded
      from the DTI ratio. 7. Monthly payment amounts for properties for which rental income is being considered
      for qualification purposes Refer to Chapter 5306 for requirements with respect to treatment of debt when using
      rental income. Refer to Chapter 5304 for requirements with respect to treatment of debt when all rental income
      and expenses are reported on IRS Form 8825, Rental Real Estate Income and Expenses of a Partnership or an
      S Corporation. 8. Monthly payment amounts for other properties ■ The monthly payment amount must include all
      of the following: ❑ Principal and interest on the First Lien. For additional information about qualifying
      rates for the Mortgage secured by the subject property, refer to Section 4401.2 for ARM requirements and Section
      4204.3 for temporary subsidy buydown plans. ❑ Taxes ❑ Insurance (e.g., hazard insurance premium and flood
      insurance premium) ■ The following additional expenses must be included when applicable: ❑ Bridge loan payment
      ❑ Mortgage insurance premiums ❑ Leasehold payments ❑ Homeowners association dues (excluding unit utility charges)
      ❑ Special assessments with more than 10 monthly payments remaining ❑ Maintenance Fees (excluding unit utility
      charges) ❑ Payment on any secondary financing (including a Home Equity Line of Credit (HELOC).'
    drafter_attestation: Verbatim from Freddie Guide §5401.2 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-5401.2-6
  canonical_id: fhlmc-5401.2-6
  section: Freddie Mac Guide 5401.2
  description: '5401.2 Monthly debt payment-to-income (DTI) ratio: 401-12 HELOC payments must be included in the
    monthly DTI ratio when there is an outstanding balance on the account. In the absence of a monthly payment on
    the credit report for the HELOC, and if there’s no documentation in the Mortgage file indicating a monthly payment
    amount, 1…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §5401.2 — Monthly debt payment-to-income (DTI) ratio
      (04/01/26)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '401-12 HELOC payments must be included in the monthly DTI ratio when there is an outstanding
      balance on the account. In the absence of a monthly payment on the credit report for the HELOC, and if there’s
      no documentation in the Mortgage file indicating a monthly payment amount, 1.5% of the outstanding balance
      will be considered to be the HELOC monthly payment amount. Refer to Section 4204.1 for when documentation
      of HELOC terms is required and to Section 5501.3 when HELOC proceeds are used for the transaction. (c) Liabilities
      that may be excluded from the monthly DTI ratio (i) Contingent liabilities A contingent liability may be excluded
      from the monthly DTI ratio when meeting the requirements in the table below. The documentation used to exclude
      the liability must meet the age of documentation requirements in Section 5102.4. Requirements for excluding
      contingent liabilities Debt type Eligibility and documentation requirements ■ Installment (not including Mortgages)
      ■ Revolving ■ Monthly lease payment Documentation in the Mortgage file must indicate the following: ■ A party
      other than the Borrower has been making timely payments for the most recent 12 months (regardless of whether
      the party is obligated on the debt) ■ The party making the payments is not an interested party to the subject
      real estate or Mortgage transaction* ■ Mortgage payment ■ Other property- related expenses (e.g., taxes, insurance,
      homeowners association dues, etc.) Documentation in the Mortgage file must indicate the following: ■ A party
      other than the Borrower has been making timely payments for the most recent 12 months ■ When a Mortgage payment
      is being excluded, the party making the Mortgage payments must be obligated on the Note ■ The party making
      the payments is not an interested party to the subject real estate or Mortgage transaction* * For examples
      of an interested party, see Section 5501.6.'
    drafter_attestation: Verbatim from Freddie Guide §5401.2 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-5401.2-7
  canonical_id: fhlmc-5401.2-7
  section: Freddie Mac Guide 5401.2
  description: '5401.2 Monthly debt payment-to-income (DTI) ratio: 401-13 Note: The Seller must evaluate the validity
    of circumstances under which the payments are being made by another party. For example, payments on multiple
    student loans made by the Borrower’s parent represent a common situation. However, additional investigation
    and document…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §5401.2 — Monthly debt payment-to-income (DTI) ratio
      (04/01/26)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '401-13 Note: The Seller must evaluate the validity of circumstances under which the payments
      are being made by another party. For example, payments on multiple student loans made by the Borrower’s parent
      represent a common situation. However, additional investigation and documentation might be necessary when
      a Borrower’s multiple installment and revolving debts are being paid by the Borrower’s spouse who is not on
      the subject Mortgage. (ii) Assumed Mortgage A Mortgage may be excluded from the monthly DTI ratio when the
      Borrower is listed as the Borrower on a Mortgage that has been assumed by another party. If the Borrower has
      not been legally released from liability on the assumed Mortgage by the Servicer or owner of the Mortgage,
      the monthly payment may only be excluded from the monthly DTI ratio when: ■ The Mortgage file contains documentation
      of the property transfer, evidencing that the Borrower no longer owns the property, and ■ The assignee (the
      party who assumed the Mortgage) has made timely payments for at least the most recent 12 months, as documented
      by: ❑ A copy of the fully executed Mortgage assumption agreement, and ❑ Evidence of timely payments on the
      assumed Mortgage for the most recent 12 months as documented on the Borrower’s credit report (iii) Current
      Primary Residence pending sale If the Borrower’s current Primary Residence is pending sale and the sale will
      not close before the Note Date of the Mortgage or the Effective Date of Permanent Financing for Construction
      to Permanent Mortgages and Renovation Mortgages, the monthly payment amount for the property pending sale
      may be excluded from the monthly DTI ratio if the Mortgage file contains an executed sales contract for the
      property pending sale. If the executed sales contract includes a financing contingency, the Mortgage file
      must also contain evidence that the financing contingency has been cleared or a lender’s commitment to the
      buyer of the property pending sale. Employee relocation programs: For Borrowers being relocated pursuant to
      an employee relocation program, the monthly payment amount for the property pending sale may be excluded from
      the monthly DTI ratio if the Mortgage meets the requirements in Section 4408.1(d)(iii) for Mortgages made
      pursuant to employee relocation programs.'
    drafter_attestation: Verbatim from Freddie Guide §5401.2 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-5401.2-8
  canonical_id: fhlmc-5401.2-8
  section: Freddie Mac Guide 5401.2
  description: '5401.2 Monthly debt payment-to-income (DTI) ratio: 401-14 (iv) Assigned debt A liability on a debt,
    including a Mortgage, may be excluded from the monthly DTI ratio if the following requirements are met: ■ The
    obligation to make the payments has been assigned to another by court order, such as a divorce decree, regardless
    of whet…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §5401.2 — Monthly debt payment-to-income (DTI) ratio
      (04/01/26)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '401-14 (iv) Assigned debt A liability on a debt, including a Mortgage, may be excluded from
      the monthly DTI ratio if the following requirements are met: ■ The obligation to make the payments has been
      assigned to another by court order, such as a divorce decree, regardless of whether the Borrower is legally
      released from liability by the creditor, and ■ The Seller documents the order (e.g., provides appropriate
      pages from the separation agreement or divorce decree) in the Mortgage file (v) Self-employed Borrower’s debt
      paid by the Borrower’s business When a self-employed Borrower is obligated on a debt that has been paid by
      the Borrower’s business for 12 months or longer, the monthly payment for the debt may be excluded from the
      monthly DTI ratio if the following requirements are met: ■ The Mortgage file contains evidence that the debt
      has been paid timely by the Borrower’s business for no less than the most recent 12 months, and ■ The tax
      returns evidence that business expenses associated with the debt (e.g., interest, lease payments, taxes, insurance)
      have been reported and support that the debt has been paid by the business (vi) Payments for solar panels
      subject to a lease agreement, PPA or similar type of agreement Lease payments for solar panels may be excluded
      from the monthly DTI ratio if the lease: ■ Provides for delivery of a specific amount of energy for an agreed-upon
      payment during a given period; and ■ Includes a production guarantee compensating the Borrower on a prorated
      basis when the energy produced by the solar panels is less than the level required in the lease agreement
      Payments for solar panels subject to a PPA or similar type of agreement may be excluded from the monthly DTI
      ratio if the payment is calculated based only on the generated energy. A copy of the lease agreement, PPA
      or similar type of agreement, as applicable, must be maintained in the Mortgage file. (vii) Payments on installment
      debts secured by financial assets Payments on installment debts secured by financial assets, other than cryptocurrencies,
      in which repayment may be obtained by liquidating the asset may be excluded from the'
    drafter_attestation: Verbatim from Freddie Guide §5401.2 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
- id: fhlmc-5401.2-9
  canonical_id: fhlmc-5401.2-9
  section: Freddie Mac Guide 5401.2
  description: '5401.2 Monthly debt payment-to-income (DTI) ratio: 401-15 monthly DTI ratio when qualifying the
    Borrower, regardless of the payment amount or number of payments remaining. The loan secured by the financial
    asset must have been made by a financial institution. The Seller may consider only the portion of the funds
    that exceeds the …'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fhlmc-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide §5401.2 — Monthly debt payment-to-income (DTI) ratio
      (04/01/26)
    source_class: gse-guide
    source_url: https://guide.freddiemac.com/
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '401-15 monthly DTI ratio when qualifying the Borrower, regardless of the payment amount or
      number of payments remaining. The loan secured by the financial asset must have been made by a financial institution.
      The Seller may consider only the portion of the funds that exceeds the loan balance as funds used to qualify
      the Borrower for the Mortgage transaction. See Chapter 5501 for more information. (d) Evaluating debt ratios
      (i) Mortgages underwritten with Loan Product Advisor Loan Product Advisor calculates and assesses the Borrower’s
      qualifying ratios based on submitted data. For Accept Mortgages, Loan Product Advisor has determined that
      the Borrower’s qualifying ratios are acceptable. (ii) Manually Underwritten Mortgages For Manually Underwritten
      Mortgages, the Seller must evaluate the Borrower’s ability to pay the monthly housing expense and other obligations.
      If the Borrower’s monthly DTI ratio exceeds 45%, the Mortgage is ineligible for sale to Freddie Mac. As a
      guideline, the monthly DTI ratio should not be greater than 36%. When the Borrower’s monthly DTI ratio exceeds
      36%, the Seller must document in the Mortgage file justification for the higher qualifying ratio. Except in
      rare circumstances, the Borrower’s DTI ratio should not exceed 36% for the following Mortgages: ■ Cash-out
      refinance Mortgages ■ Mortgages secured by 2- to 4-unit properties ■ Mortgages where there is evidence that
      the Borrower increases debt and then periodically uses refinance or debt consolidation loans to reduce payments
      to a manageable level The following factors may be considered in justifying a DTI ratio that exceeds 36% but
      is not greater than 45%:'
    drafter_attestation: Verbatim from Freddie Guide §5401.2 body (max-gap occurrence), snapshot 5869ee9e606cd4ae;
      substring-verified.
  judgment: false
