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Can I Purchase A House Having a SSI Income?

I was interested in possible buying a home but was unsure if I could because of my permanent disability income ($730). I was thinking it would have to be through FHA. I recently had a pre-purchase counseling session and was told by the credit counselor that I could in fact purchase a house because of my credit score (724) but I would need to work on my back-end DTI. Also, that I should go for a conventional loan because the monthly payments would be cheaper opposed to an FHA.

Now that all was great, or so I thought until I started calling lenders from the PHFA site. The 3 lenders I spoke with told me that my income was too low for a mortgage. Now I'm confused and disappointed. I worked hard to get my credit score up. Was researching and came across, "Home Possible Mortgages" through Freddie Mac. I was wondering if I qualified for that program or any others someone may know of?
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October 08 2013 - Philadelphia
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Thank you everyone for your advice.There will be no co-signer or borrower, just myself. I only have about $4k to put down. I will continue my search for a lender. I've been looking in the Delaware county Pa area.I know that I can't go over $60k. Maybe a 'short sale' ,but then again I'm not sure how that works either.
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October 09 2013
Your SSI can be counted as income but you have to show that it will continue for up to 3 years.  In most cases lenders find this hard to document.  Would you have a co-signer/co-borrower to go on the loan with you?  They'll need a min of 620 credit score with this option then YES you can get a mortgage.  If you're doing this by yourself it's going to be HARD to qualify for a mortgage by yourself unless you put down a good bit of money!   If you need any assistance please contact me through my profile
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October 09 2013
SSI can be used as a source of qualifying income, and in some cases, grossed up(multiplied by 25%) such as if the amount received is not taxed.  But as in any prequalifying scenario, you must meet all the mortgage lenders underwriting criteria and debt to income is one of those.  Keep in contact with one the licensed mortgage professional you spoke to about working towards getting your qualifying credentials where they need to be.  Best of luck!
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October 08 2013
You have lots of good replies in this forum, so I won't belabor the good points previously made. 

SSI can be counted as income, but the factors that go into getting a loan are complex and ever-changing.  (And very hard to adequately cover in a forum such as this!)

Pick a few lenders in your local area and let them help you understand what you DO qualify for.

Good luck to you!

The Dalberth Group
774-200-5810
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October 08 2013
Lenders are certainly able to use SSI as a source of income as long as it's not temporary. This doesn't mean it may be enough for a mortgage though. Also, do you have down payment? The key thing to keep in mind is that a conventional may need a down payment of anywhere from 10%-20% and an FHA will only need 3.5%. I would recommend trying a few more lenders.

Well I hope this helps! If you have any other questions or if you need a loan, feel free to contact me.

Good Luck!
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October 08 2013

Sometimes FHA loans allow for as much as 57% on the backend. What amount are you putting down?   Our conventional portfolio guidelines allow for a 50% debt ratio as long as you qualify for a product that does not require PMI.  Please contact me via my profile if you would like to discuss.

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October 08 2013
As mentioned below, SS income can definitely be used to qualify and your credit scores are great, but those two things alone won't fully qualify you for a mortgage. 

One thing to note is that if you are not taxed on the SS income, your lender can "gross it up" by 25% in most cases. This allows you to use a number higher than $730, but you would still need to fall into the 45% debt-to-income ratio (sometimes higher with an exception). If you are able to gross up your SS income, the number would be $912.50 and 45% of that would be $410.63. So $410 would have to cover your housing (including property taxes and homeowner's insurance) and all other debts.

I hope this helps to clear things up a little bit for you. Best of luck!
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October 08 2013
Typically speaking in order to qualify you will only want your total debt to total 45% of that $730. So that is $328 per month. After taxes and insurance, that is not going to get you much of a house.  Is there a co-borrower at all that would add to the equation
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October 08 2013
Yes, you can use permanent disability income to qualify.   Credit score alone is not going to qualify you to purchase.   If your income is 730 per month and this is your only income source, you can likely "gross up" to 912 as your qualifying income since your income is not taxable.   For a conventional loan, the maximum "back end" you are likely to qualify is $410 per month to include your existing monthly debt obligations, plus your new mortgage payment, plus property tax, home insurance, and possibly mortgage insurance depending on the size of your down payment.

Subtract from 410 any monthly expenses on your credit report for credit card, auto loan, etc and whatever is left is what you can qualify for on your housing expense for a mortgage loan.   If you can find a property where the proposed payment with tax/insurance is less than that number, then you have a chance to qualify.
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October 08 2013
 
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