I am not sayin you can't use residual income to qualify, as it is specifically allowed for a SCQM:
2. Debt-to-income ratio or residual income. Section 1026.43(e)(5) does not prescribe a specific monthly debt-to-income ratio with which creditors must comply. Instead, creditors must consider a consumer's debt-to-income ratio or residual income calculated generally in accordance with § 1026.43(c)(7) and verify the information used to calculate the debt-to-income ratio or residual income in accordance with § 1026.43(c)(3) and (4).
What I am saying is that you should have an established policy as to what is acceptable regarding both of those factors if you choose to rely on both of them for underwriting purposes. Then violations of policy could lead down a number of bad roads, i.e., fair lending, QM challenge, etc.
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