FHA Loan DTI Calculator
Your Financial Inputs
Enter your information to calculate your debt-to-income ratio for an FHA loan
FHA Loan Requirements
Understand what lenders look for when approving FHA loans
Buying your first home feels exciting-until you realize you need to prove you can afford it. If you’re looking at an FHA loan, you’re probably wondering: What income is needed for an FHA loan? The answer isn’t a single number. It’s not $50,000 or $60,000. It’s not even about how much you make. It’s about how much you can safely pay each month without drowning in debt.
There’s no minimum income for an FHA loan
You won’t find a rule that says, “You must earn $45,000 a year.” The Federal Housing Administration doesn’t set a floor. Instead, they look at your debt-to-income ratio, or DTI. That’s the percentage of your gross monthly income that goes to paying debts-your car loan, credit cards, student loans, and your new mortgage.
Most lenders want your total DTI to stay under 43%. That means if you make $5,000 a month before taxes, your total monthly debt payments-including your new FHA mortgage-can’t go over $2,150. Some lenders will stretch to 50% if you have strong credit or big savings. But 43% is the standard safety line.
Your mortgage payment isn’t your only cost
Let’s say you’re approved for a $250,000 home with a 3.5% down payment. Your monthly principal and interest might be around $1,100. But that’s not all. FHA loans require mortgage insurance-both an upfront fee and a monthly premium. For a $250,000 loan, that’s roughly $150 extra per month. Then there’s property taxes and homeowners insurance. Add those in, and your full monthly payment could be $1,400 to $1,600.
So if your other monthly debts (car payment, student loans, minimum credit card payments) add up to $500, your total debt payments hit $2,100. That means you need to earn at least $4,880 a month before taxes to stay under the 43% DTI limit. That’s about $58,500 a year.
What if you make less than $50,000 a year?
You still qualify. Many first-time buyers do. The key is keeping your other debts low. If you have no car loan, no credit card balances, and no student debt, you might get approved on $40,000 a year. Let’s say you make $3,333 a month. Your max allowable debt payments are $1,433 (43% of $3,333). If your FHA payment is $1,200, you only have $233 left for everything else. That’s tight-but doable if you’ve paid off your old debts.
Some buyers make $35,000 and qualify because they live with parents, have no car payment, and save aggressively. Others make $70,000 and get denied because they’re carrying $800 in credit card debt and a $600 car loan. It’s not about the paycheck. It’s about the balance sheet.
How lenders check your income
Lenders don’t guess. They demand proof. If you’re W-2 employee, you’ll need your last two pay stubs and your last two W-2 forms. Self-employed? You’ll need two years of tax returns, including Schedule C or K-1. Bonus income? They’ll average it over two years. Commission? Same thing.
They’ll also check your employment history. If you switched jobs last month, they’ll want to know why. A promotion is fine. A gap in employment? That needs explanation. Lenders want to see stability-not just a high number on a paycheck.
What if your income is irregular?
Freelancers, gig workers, and seasonal employees can still qualify. But they need more documentation. You can’t just show one month’s bank deposit. You need at least two years of tax returns showing consistent income. If your income dropped 30% last year, lenders will use the lower number. If it went up? They’ll average both years.
Some people try to boost their income by adding a co-signer. That’s allowed-but the co-signer’s debt and income get added to the equation. If your mom co-signs and has $1,000 in monthly debt, that reduces how much you can borrow. It’s not a shortcut. It’s a shared risk.
How to improve your chances
Here’s what actually works:
- Pay down credit card balances before applying. Even $2,000 paid off can make the difference.
- Don’t take on new debt. No new car loan, no maxed-out credit card.
- Save for closing costs. FHA loans let you get help with down payment, but not always with closing fees.
- Check your credit report. Errors can lower your score. FHA requires 580 for 3.5% down. If it’s below 580, you’ll need 10% down.
- Use an FHA-approved lender. Not all lenders know how to handle non-traditional income.
What happens if you don’t qualify?
If your DTI is too high, you have options:
- Wait six months, pay down debt, then reapply.
- Look for a cheaper home. A $200,000 home instead of $250,000 cuts your payment by $200-$300 a month.
- Ask a family member to gift you the down payment. That doesn’t count as debt.
- Consider a state or local first-time buyer program. Many offer down payment assistance that lowers your monthly payment.
Don’t give up. Many buyers get denied the first time. They fix their debt, wait a few months, and come back approved. It’s not about being rich. It’s about being responsible.
Real example: How Sarah bought her first home on $42,000 a year
Sarah worked as a medical assistant in Boise. She made $3,500 a month. She had a $250 car payment and $120 in student loans. Her total monthly debt: $370. She found a $180,000 FHA-approved home. Her mortgage payment: $1,150. Taxes and insurance: $200. FHA mortgage insurance: $130. Total monthly housing cost: $1,480. Add her other debts: $1,850. Her DTI: 53%-too high.
She paid off her car loan early with a $5,000 gift from her dad. Her new debt: $120 (student loan) + $1,480 (mortgage) = $1,600. DTI: 46%. Still high. She applied for a local down payment assistance program that reduced her loan amount by $10,000. Her new payment: $1,300. Total monthly debt: $1,420. DTI: 41%. Approved.
She didn’t need a six-figure salary. She needed a plan.
Do I need a perfect credit score to get an FHA loan?
No. FHA loans are designed for buyers with lower credit. You need at least a 580 score to qualify for the 3.5% down payment. If your score is between 500 and 579, you can still qualify-but you’ll need to put down 10%. Most lenders prefer 620 or higher, though, because they’re more comfortable approving those loans.
Can I use gift money for my down payment?
Yes. FHA allows 100% of your down payment to come from a family member, like a parent, sibling, or grandparent. You’ll need a gift letter stating it’s not a loan and that repayment isn’t expected. The donor must also prove they have the money to give-usually with a bank statement.
Is FHA better than a conventional loan for first-time buyers?
For many, yes. FHA loans require lower down payments and credit scores. Conventional loans often need 5% to 20% down and a 620+ credit score. But FHA loans require mortgage insurance for the life of the loan unless you put down 10% or more. Conventional loans let you cancel PMI once you hit 20% equity. So if you expect your home value to rise fast, a conventional loan might save you money long-term.
Can I get an FHA loan if I’ve owned a home before?
Yes. FHA loans aren’t just for first-time buyers. You can use one again if you don’t currently own a home. The only restriction is you can’t have another FHA loan outstanding. If you sold your last home and paid off the FHA loan, you’re eligible again.
What if I’m self-employed?
You need two years of tax returns showing consistent income. Lenders will average your net income from Schedule C. If your income dropped last year, they’ll use the lower number. You can’t just use your bank deposits. They need IRS documentation. Some lenders allow alternative documentation if you’ve been in business less than two years-but that’s rare.
Next steps if you’re ready to apply
Start by checking your credit report for free at AnnualCreditReport.com. Look for errors or old debts you forgot about. Then calculate your monthly debt payments. Add up your car loan, student loan, credit card minimums, and any other recurring bills.
Use an online FHA loan calculator to estimate your monthly payment based on a home price you’re targeting. Then add in taxes, insurance, and mortgage insurance. Compare that to your total debt. If it’s under 43% of your gross income, you’re in the ballpark.
Finally, talk to an FHA-approved lender. Don’t just go to your bank. Go to a lender who specializes in first-time buyers. They’ll know the programs, the paperwork, and the pitfalls. Most offer free pre-approvals. That’s not a commitment. It’s a reality check.
You don’t need to be rich to own a home. You just need to be honest about what you owe-and willing to make a plan.