Video — DTI (Debt-to-Income) Ratios for FHA-backed Loans

The Federal Housing Authority revises the guidelines for acceptable DTI (Debt-to-Income Ratio) on FHA-backed loans regularly. They have increased slightly in the last few years.

In 2013, for example, DTI allowed up to 29% of earnings as real-estate expenses, and 41% in total long-term debts including real estate.

As of 2020, FHA guidelines allow up to 31% in real estate and 43% in total monthly debt payments.

Approval to exceed these ratios is sometimes allowed, if:

You can make a large down payment

You have large cash reserves

Other assets that make a substantial personal net worth

Your credit history is especially good

The mortgage terms are better than current averages

Another organization is providing some of the mortgage funds

Keep in mind that these are maximums, aimed at helping consumers take on sustainable levels of debt. Consider your long-term situation carefully and dont think of these ratios as automatic targets.