Quick answer
Manual underwriting is a review of a mortgage application by a human underwriter applying the loan program’s written guidelines, rather than relying on an automated system’s approval. It’s used when the automated system refers the file or can’t evaluate it, for example a borrower with no credit score, and its limits are usually stricter.
Key facts
Stricter limits
| Fannie Mae | FHA | |
|---|---|---|
| Total DTI | 36%, up to 45% with the required score and reserves | 43% without compensating factors |
| Housing ratio | No separate limit | 31% without compensating factors |
| Minimum credit score | 620 on fixed-rate loans | 500 |
By comparison, Fannie Mae’s automated underwriting can approve a DTI up to 50%.
Preparing a manual file
Compensating factors such as extra reserves, a new payment close to your current rent, or steady income the lender didn’t count can justify ratios above the baseline where the program allows. Expect the underwriter to read bank statements line by line and ask for written explanations of late payments, gaps in work or large deposits. With little traditional credit, the lender may build a history from rent, utility and insurance payments. The DTI guide covers how each debt is counted.
Sources
- Fannie Mae Selling Guide B3-6-02 — Fannie Mae maximum DTI, manually underwritten loans; Fannie Mae maximum DTI, manual underwriting with strong credit and reserves; Fannie Mae maximum DTI, Desktop Underwriter loans (Apr 2, 2025)
- HUD Mortgagee Letter 2026-11 — FHA manual underwriting debt-to-income ratio (no compensating factors); FHA manual underwriting housing ratio (no compensating factors); FHA minimum decision credit score (90% LTV cap from 500 to 579) (Oct 8, 2026)
- Fannie Mae Selling Guide B3-5.1-01 — Fannie Mae minimum score, manually underwritten fixed-rate loans (Apr 22, 2026)
- Fannie Mae Eligibility Matrix
Last reviewed Figures are checked against the sources above. Read our editorial policy. This page is general information, not financial advice — see the disclaimer.