Monday, May 26, 2008

FHA TIP CABO Standards allow for higher ratios

Did you know that if your property meets CABO standards(Council of American Building Officials) you can have higher ratio's in a manual underwrite?

The ratios can be33/45 for ENERGY-EFFICIENT HOMES (EEH). The benchmark qualifying ratios may both be exceeded by up to 2 percentage points when the borrower is purchasing or refinancing an EEH. These higher housing expense- and obligations-to-income ratios are justified due to the anticipated energy costs savings and become 33 percent and 45 percent, respectively. The appropriate HOC determines if a property qualifies for EEH designation. The original documentation attesting to energy efficiency is required on resales.
All properties meeting the Council of American Building Officials (CABO) 1992 Model Energy Code (MEC) are considered energy efficient and eligible for the two percentage points increase in the qualifying ratios.
You would need the Builder's Certification completed and the builder would need to certifys that the property meets CABO standards. The builder Certification can be found at HUD Clips form number 92541

Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to or