How do I calculate DTI for an FHA loan?
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.
What this actually means.
For the total DTI, add the new full housing payment (principal, interest, taxes, insurance, monthly MIP, HOA and CDD) to required monthly payments such as credit cards, auto loans, student loans, personal loans, child support and alimony. Do not include normal living costs such as groceries, utilities or fuel. Divide that total by gross monthly qualifying income before taxes. Base pay may be straightforward. Variable income such as overtime, bonuses or commission must be averaged under the applicable rules. Two years is common, but some overtime or bonus income may qualify with at least one documented year when it has been consistent and is likely to continue. The housing DTI uses only the housing payment. The total DTI includes housing plus the other required debts.
What this looks like on a real file.
Where this can move.
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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Educational only. FHA guidelines, lender overlays, rates, fees, and underwriting requirements can change. Final eligibility depends on full underwriting review. Mortgage Expert, Inc. is not affiliated with HUD, FHA, or any government agency.