To a lender, the support you pay is a fixed monthly bill set by a court order or written agreement. It goes on the debt side of your ratio next to your car payment and card minimums, and the order itself tells the lender two things: the amount and when it ends. Plenty of parents who pay support buy homes. The support is one more line in the math.
How each program counts the support you pay
| Program | How the support is counted |
|---|---|
| FHA | As a monthly debt in the total debt-to-income ratio, using the amount in your decree, order or agreement |
| Conventional (Fannie Mae) | As a monthly debt when payments must continue for more than ten months. Support ending within ten months can be left out |
| VA | As a monthly debt in the ratio, and it's also subtracted when VA checks your residual income, the money left after the house payment, debts and living costs |
| USDA | As a monthly debt in the 41% total ratio |
The lender reads the amount from your divorce decree, child support order or separation agreement. Because the support counts as a debt, it affects your back-end ratio, which covers all debts plus the house payment. It doesn't touch the housing ratio, which looks at the house payment alone.
A worked example: $650 a month in support
Marcus earns $5,800 a month. He pays $650 a month in court-ordered child support and $280 on a car loan, so his monthly debts total $930. Each program sets its limit differently:
| Program | Math | Highest housing payment |
|---|---|---|
| FHA | Lower of 46.9% × $5,800 = $2,720.20 and 56.9% × $5,800 − $930 = $2,370.20 | $2,370.20 |
| Conventional | 50% × $5,800 − $930 | $1,970.00 |
| VA | 41% × $5,800 − $930 as a guide, higher when residual income clears VA's table | $1,448.00 |
| USDA | Lower of 29% × $5,800 = $1,682.00 and 41% × $5,800 − $930 = $1,448.00 | $1,448.00 |
On FHA, with 3.5% down at a 5.75% rate on a 30-year fixed, taxes at about 0.90% of the price a year and insurance at $283 a month, a $2,370.20 payment buys a home of about $301,500. FHA's higher total limit gives Marcus the most room here.
Now say his youngest turns 18 in eight months and the order ends then. On a Conventional loan, support with ten months or less left drops out of the ratio, and his limit becomes 50% × $5,800 − $280 = $2,620.00. That's $650 more room each month, which is why it pays to show the lender the end date in your order.
If you're behind on support
Tell us early. Past-due support can show up on a credit report, and the lender will look at the order and the payment history from the state child support agency. Bringing the balance current, or showing steady on-time payments on a plan the court or agency approved, puts the strongest record in front of the underwriter. Payments that have been on time through the agency for the last year are good evidence on their own.
Ways to qualify for more
- Pay off a small debt. Every dollar of monthly debt you remove gives a dollar back on the total ratio. Paying off Marcus's $280 car loan would raise his FHA housing limit from $2,370.20 to $2,650.20.
- Add a co-borrower. On FHA and Conventional loans, a co-borrower's income counts with yours, and a parent or relative doesn't have to live in the home.
- Count support you receive. If you also receive support for another child, that income counts, and FHA raises it by 15% because it isn't taxed. The child support income page shows how.
- Buy a duplex. On FHA, 75% of the rent from the other unit is added to your income.
- Cover the cash with FHA 100% financing. A down payment assistance second covers the 3.5% from a 580 score, so the support you pay doesn't have to compete with savings.
Enter your income, your support payment and your other debts in the DTI calculator to see each program's limit side by side. Then call AAA Capital Funding at 888-601-8344 with your order in hand, and we'll show you which program gives you the most house with the support counted.