FHA debt-to-income limits: 31/43 and the exceptions

Two ratios, not one

FHA looks at two percentages. The first is the Total Mortgage Payment to Effective Income ratio, called PTI or the housing ratio. The second is the Total Fixed Payment to Effective Income ratio, called DTI or the total ratio. When the Handbook writes 31/43, the first number is the cap on the housing ratio and the second is the cap on the total ratio. Both must be met at the same time. A borrower can be well under 43 on total debt and still fail by being over 31 on housing alone.

What goes into each ratio

The total mortgage payment includes principal and interest, real estate taxes, hazard insurance, flood insurance where it applies, the FHA mortgage insurance premium, HOA or condominium fees, ground rent, special assessments, payments on any acceptable secondary financing and any other escrow payments. The total fixed payment is that mortgage payment plus the monthly obligations on all debts and liabilities. A debt wholly secured by your own existing assets can be left out, provided those assets are not also used to qualify you. If a temporary buydown is involved, the lender uses the note rate to figure principal and interest, not the reduced rate. A portion of a condominium fee clearly attributable to utilities can be subtracted when you document it with utility statements.

The matrix, row by row

The Handbook's Approvable Ratio Requirements chart for manual underwriting has these rows. At a minimum decision credit score of 500 to 579, or with no credit score, the limit is 31/43 and nothing more. At 580 and above, 31/43 needs no compensating factors. Also at 580 and above, 37/47 needs one of three factors: verified cash Reserves, a minimal increase in housing payment, or residual income. 40/40 needs no discretionary debt. 40/50 needs two factors drawn from Reserves, minimal increase in housing payment, significant additional income not reflected in Effective Income, and residual income. Energy Efficient Homes can stretch the 31/43 rows to 33/45.

What the compensating factors require

Reserves count when they equal at least three total monthly mortgage payments for one- and two-unit homes, or six for three- and four-unit homes, after subtracting funds to close, gifts, borrowed funds and cash received at closing. A minimal increase means the new payment is no more than $100 or 5 percent above the current housing payment, whichever is less, with a documented 12-month housing history showing no more than one 30-day late payment; someone with no current housing payment cannot cite it. No discretionary debt means the housing payment is the only open account with a balance not paid off monthly, plus credit lines in your own name open six months and paid in full monthly for six months. Additional income from overtime, bonuses, part-time or seasonal work needs a year of receipt and must be large enough that adding it would bring the ratios to 37/47 or less, and above 37/47 it can be cited only together with another factor. Residual income must meet the amounts in the VA table the Handbook points to.

A worked example

Take $6,000 of gross monthly income, a $1,800 total mortgage payment and $400 of other monthly debts. PTI is 30 percent and DTI is 36.67 percent, so the standard 31/43 row is met without any factor. Now take $5,000 of income, a $1,750 payment and $500 of debts: PTI is 35 and DTI is 45, which fails 31/43 on both counts. It fits 37/47, since 35 is under 37 and 45 is under 47, so one documented factor such as Reserves is enough. The checker above runs the same comparison across every row you can use, and shows which factor each row needs.

Where the matrix does not reach

This page covers the manual-underwriting chart. It does not describe how the automated TOTAL Mortgage Scorecard weighs ratios, and the checker should not be read as predicting an automated decision. The Handbook also says a lack of traditional credit history, or a decision not to use credit, cannot be the sole basis for denying an application, and that compensating factors cannot make up for derogatory credit. Ratios are also only as good as the income feeding them, so see how income is built for self-employed borrowers, Social Security recipients and landlords.

Sources

• HUD Handbook 4000.1, FHA Single Family Housing Policy Handbook, Update 18 PDF: Manual Underwriting of the Borrower: Calculating Qualifying Ratios, Approvable Ratio Requirements and Documenting Acceptable Compensating Factors, Handbook pp. 359-361 (heading Final Underwriting Decision (Manual) (11/10/2026)(08/19/2024)). Read November 2, 2026.
• HUD, Single Family Housing Policy Handbook 4000.1 information page. Read November 2, 2026.

Text read: HUD Handbook 4000.1, FHA Single Family Housing Policy Handbook, the clean Update 18 PDF that HUD links from its Handbook 4000.1 information page (HUD lists it as the August 12, 2026 update). Section headings carry their own effective dates, given above for this page. Confirm current dollar limits and premium rates with an FHA-approved lender. This page paraphrases the Handbook and does not replace it. Page numbers cited are the Handbook's own and may be approximate; use the section headings to locate the text.