Debt Ratio

How do I calculate DTI for an FHA loan?

Short answer

DTI compares monthly debts to gross monthly income. Add the new FHA housing payment (P&I + property taxes + homeowners insurance + MIP + HOA + CDD if any) plus credit card minimums, car loans, student loans, child support, and alimony. Divide by your gross monthly income. Front-end DTI uses just the housing payment; back-end DTI uses the full debt stack.

Plain-English explanation

Numerator (back-end DTI): new full housing payment (principal + interest + taxes + insurance + monthly MIP + HOA + CDD), plus minimum monthly payments on credit cards, auto loans, student loans (FHA has specific student-loan calculation rules — confirm with the lender), personal loans, child support, and alimony. Do not include normal living expenses like groceries, utilities, or fuel. Denominator: gross monthly income before taxes — base salary, plus stable overtime/bonus/commission with two-year history, plus other documented qualifying income (Social Security, pension, disability with appropriate gross-up, child support if court-ordered and likely to continue). Front-end DTI is the same numerator with only the housing payment, divided by the same income. Subject to FHA/HUD guidelines and lender overlays.

Practical example

A buyer earning $7,000/month gross has a new FHA payment (PITI + MIP + HOA) of $2,200, plus a $400 car payment, $250 student loan payment, $150 credit card minimums. Total debt = $3,000. Back-end DTI = 3,000 / 7,000 = ~43%. Front-end DTI = 2,200 / 7,000 = ~31%.

What can change the answer?

Income type and history, recurring debts shown on the credit report, automated vs manual underwriting, compensating factors, and lender overlays can change the answer.

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