If you are using the loss as a deduction, I believe it will be subtracted from your I side of the DTI ratio. I had a home office deduction on my taxes that was deducted from income for the DTI calc. I closed in Oct, and they were pretty thorough in the underwriting.

Talk to a pro about current standards. Sheldon helped me get my finance documents in order well ahead of going into escrow (also because I was so picky about finding a house). Be sure your DP is seasoned and you don’t have any bank deposits other than your W2 income (if possible). I was cashing my girlfriends rent contribution at the time, so I wouldn’t have any deposits.

However, I am not sure if there are guidelines about heavy gambling wrt credit worthiness.

Is he playing poker? I would like to get some of that $7500 😉