Quantcast

FHA guidelines have been set requiring borrowers to qualify according to established debt-to-income ratios. In most cases, the highest debt-to-income ratio acceptable to qualify for a mortgage is 43%, although many larger lenders may look past that figure.

FHA Mortgage Loan Rates

July 19, 2019
FHA Rates for July 19, 2019
Compare 30 Year Fixed Mortgages
Compare 15 Year Fixed Mortgages
Use our mortgage calculators
to see what you can afford!
Get started one
Get started two
Get started three
Get started four
FHA.com is a privately owned website, is not a government agency, and does not make loans.

Choose a Loan Type

then
get
your

Your Credit Score

Do you know what's on
your credit report?
Get Credit Score Button
Get Credit Score Button
FHA.com is a privately owned website, is not a government agency, and does not make loans.

FHA Requirements

Debt-to-Income Ratio Guidelines

In order to prevent homebuyers from getting into a home they cannot afford, FHA requirements and guidelines have been set in place requiring borrowers and/or their spouse to qualify according to set debt to income ratios. These ratios are used to calculate whether or not the potential borrower is in a financial position that would allow them to meet the demands that are often included in owning a home.

Debt Ratio Guidelines

The two ratios are as follows:

1) Mortgage Payment Expense to Effective Income

Add up the total mortgage payment (principal and interest, escrow deposits for taxes, hazard insurance, mortgage insurance premium, homeowners' dues, etc.). Then, take that amount and divide it by the gross monthly income. The maximum ratio to qualify is 31%.

See the following example:

Total amount of new house payment:
$750
Borrower's gross monthly income (including spouse, if married):
$2,850
Divide total house payment by gross monthly income:
$750/$2,850
Debt to income ratio:
26.32%

2) Total Fixed Payment to Effective Income

Add up the total mortgage payment (principal and interest, escrow deposits for taxes, hazard insurance, mortgage insurance premium, homeowners' dues, etc.) and all recurring monthly revolving and installment debt (car loans, personal loans, student loans, credit cards, etc.). Then, take that amount and divide it by the gross monthly income. The maximum ratio to qualify is 43%.

See the following example:

Total amount of new house payment:
$750
Total amount of monthly recurring debt:
$400
Total amount of monthly debt:
$1,150
Borrower's gross monthly income (including spouse, if married)
$2,850
Divide total monthly debt by gross monthly income:
$1,150/$2,850
Debt to income ratio:
40.35%

Please note that the above indicators do not exclusively determine whether or not a candidate will qualify for an FHA loan. Other factors will be considered, including credit history and job stability.

SEE YOUR CREDIT SCORES   From All 3 Bureaus  

Do you know what's on your credit report?

Learn what your score means.


GET STARTED

FHA Loan Articles and Mortgage News

FHA Refinance Loan Questions and Answers

July 17, 2019 - Borrowers looking into their FHA refinance loan options aren’t always sure where to begin; the right kind of refinance loan for you may not be the right refinance for someone else. It all depends on why you want to refinance and how you need to apply the loan funds.

One-Time Close Construction Loans: Build Or Buy?

July 16, 2019 - The One-Time Close construction loan, an option for FHA loan applicants, VA loan applicants, and USDA borrowers, offers the ability to have a home built from the ground up. Is this the right choice for you? Some borrowers have a sense of urgency about getting moved into a new home.

Which FHA Refinance Loans Require a New Credit Check?

July 15, 2019 - The short answer is that most of them do. There is only one FHA refinance loan that has no FHA-required credit check, and most typical FHA forward mortgages for purchasing a new property will require one. Credit scores and credit history are important factors for home loan approval.

Credit Repair Advice for First-Time Home Buyers

July 14, 2019 - Long before you apply for an FHA mortgage or refinance loan, you will need to work on establishing or maintaining reliable credit patterns. Your lender is looking for these patterns to justify approving your mortgage loan application.

Missing an FHA Home Loan Payment

July 12, 2019 - You'll get advice about making 100% on-time payments for all financial obligations 12 months or more before you apply for the mortgage. But after you get the loan, if you miss payments on your mortgage, what kind of repercussions can you expect and what should you do?

FHA.com Reviews

FHA.com is a one-stop resource for homebuyers who want to make the best decisions when it comes to their mortgage. With our detailed, mobile-friendly site, individuals can access information about different FHA products, the latest loan limits, and numerous other resources to make their homebuying experience easier. Take a look at some of the reviews from other FHA.com visitors!