We currently utilize a calculator that splits the loan payment when the collateral includes more than 40 acres (consumer purpose loan made to a farmer, purpose is to refinance home and other consumer debt). In the example below, only $16,470 would be counted as consumer debt in the PITI and then the remaining $23,058 would be considered ag debt and deducted from the total income for the DTI.

I am curious if there is any regulatory reason to split the debt out?

Home Value $250,000
Total Collateral Value $600,000
Annual Payment $39,528 (Home-$16,470, Land $23,058)