What Is the Debt-to-Income Ratio for FHA Loans?

Debt-to-income ratio is a percentage you get by dividing your monthly debt payments by your monthly gross income. For example, say your monthly debt payments for a student loan and a car loan total $1,000. Then say your monthly gross income is $5,000. In this case, your debt-to-income ratio is 20%. (That is $1,000 ÷ $5,000 = 0.20 or 20%.) FHA loans often have a maximum debt-to-income ratio of 43% in the absence of any significant compensating factors. This means all your debt payments—including your FHA mortgage payment—cannot result in a DTI higher than 43%.

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Do FHA Loans Have Income Requirements?

How Debt-to-Income Ratio Affects Your FHA Eligibility

Federal Housing Administration (FHA) loans help make buying or refinancing a home more affordable. These loans are popular with first-time homebuyers as well as homebuyers who may have lower credit scores or less money for a down payment.

At Freedom Mortgage, we sometimes get asked, "Do FHA loans have income requirements?"; Often these questions are about whether there is a minimum income you need to qualify for an FHA loan. For example, a homebuyer might ask, "Do I need to make at least $50,000 a year to get approved for an FHA loan?"

The answer to this question is "no." There are no minimum income requirements for FHA loans. However there is often a maximum debt-to-income ratio (DTI) requirement that does affect your eligibility.

Debt-to-Income Ratios for FHA Loans

Debt-to-income ratio is a percentage you get by dividing your monthly debt payments by your monthly gross income. For example, say your monthly debt payments for a student loan and a car loan total $1,000. Then say your monthly gross income is $5,000. In this case, your debt-to-income ratio for the mortgage is 20%. (That is $1,000 ÷ $5,000 = 0.20 or 20%.)

FHA loans often have a maximum debt-to-income ratio of 43% in the absence of any significant compensating factors. This means all your debt payments—including your FHA mortgage payment—cannot result in a DTI higher than 43%. Take a look at this sample calculation:

Monthly gross income	$5,000
Monthly debt payments	$1,000
FHA mortgage payment	$1,100
Total debt payments	$2,100
DTI calculation	$2,100 ÷ $5,000 = 0.42
Debt-to-income ratio	42%

In this example, the homebuyer might qualify for an FHA loan with a monthly payment of approximately $1,100. You can see that their monthly income affects whether they qualify for an FHA loan and how much they may be able to borrow to buy a house.

When you are estimating your debt-to-income ratio, keep in mind that your monthly FHA mortgage bill includes payments for interest, principal, mortgage insurance premiums (MIP), property taxes, and homeowners insurance. The cost of your taxes and insurance will also affect your DTI and the price of houses you can afford to buy as a result. Keep in mind you will still need to meet other credit and financial requirements to get approved for an FHA loan.

Debt-to-Income Ratios for FHA Loan Refinances

When you are refinancing an FHA loan with the streamline program, you can often avoid calculating a new DTI. FHA streamline refinances let you replace your current FHA loan with a new FHA loan which has a lower rate or better terms. The FHA streamline program offers less paperwork, fewer credit and income requirements, and faster closings.

*Freedom Mortgage is a top FHA lender in the United States, according to Inside Mortgage Finance, Jan.–Sep., 2024.

Last reviewed and updated February 2024 by Freedom Mortgage.