FHA Loan DTI Requirements — How Much Debt Can You Have?
Debt-to-income ratio (DTI) measures how much of your gross monthly income goes toward debt payments. Here’s exactly how it works with FHA loans and what limits apply.
What Is DTI?
DTI is expressed as two numbers:
- Front-end ratio: Your proposed monthly housing payment (principal, interest, taxes, insurance, MIP, and HOA) divided by your gross monthly income
- Back-end ratio: All monthly debt obligations including housing, credit cards, auto loans, student loans, child support, etc., divided by gross monthly income
FHA DTI Limits
| Underwriting Path | Front-End | Back-End |
|---|---|---|
| AUS Approval (automated) | No hard max | Up to 50%+ possible |
| Manual Underwrite (standard) | 31% | 43% |
| No Credit Score / Non-Traditional Credit | 31% | 43% — no exceptions |
What Counts Toward Your DTI?
Must be included:
- Monthly housing payment (PITI + MIP + HOA)
- Auto loans
- Minimum credit card payments
- Student loans (even if deferred — typically 0.5% of outstanding balance if credit report shows $0)
- Child support or alimony (if owed for more than 10 months)
- Co-signed loans
May be excluded:
- Installment loans with 10 or fewer payments remaining (if cumulative payment ≤ 5% of gross income)
- Student loans fully forgiven or discharged (with documentation)
Student Loans — Important Detail
If your income-driven repayment plan shows a $0 monthly payment on your credit report, FHA requires the lender to use 0.5% of your outstanding student loan balance as the monthly obligation. Example: $80,000 in student loans = $400/month added to DTI.
Practical Takeaways
- With AUS approval, back-end DTI can exceed 50%
- Manual underwriting caps at 43% back-end standard
- Student loans count even when deferred
- Work with a loan advisor to calculate your exact DTI before assuming you won’t qualify