How much house can I afford with an FHA loan?

With an FHA loan, your debt-to-income (DTI) limits are typically based on a 31/43 rule of affordability. This means your monthly housing payment should be no more than 31% of your pre-tax income, and your total monthly debts should be less than 43% of your pre-tax income. These limits can be higher under certain circumstances with compensating factors.

A simple example

If you make $3,000 a month ($36,000 a year):

• Your total monthly debt with an FHA loan should be no more than $1,290 ($3,000 × 0.43).
• That means your housing payment should be no more than $900 ($3,000 × 0.31).

Down payment and credit score

FHA loans typically allow a lower down payment and credit score than conventional loans, if requirements are met:

• 3.5% down for credit scores of 580 or higher.
• 10% down if your credit score is between 500–579.

Keep in mind that, generally, the lower your credit score, the higher your interest rate — which affects how much house you can afford.

FHA-specific costs to budget for

• Loan limits. FHA loans are capped at a maximum size that varies by the property’s location (county).
• Upfront mortgage insurance premium (UFMIP). Paid as part of closing costs.
• Annual mortgage insurance premium (MIP). Included in your monthly payment — and unlike conventional PMI, it often stays for the life of the loan.

Both insurance premiums reduce your affordability, so factor them in. You can model different payments in our affordability calculator.

Not sure which loan fits your situation? Ask a Florida agent — free and no obligation.