FHA Home Affordability Guidelines

One of the first steps that you should perform before starting a search for a home is to sit down and determine just how much home you can afford.  Doing so is a relatively simple process.

How Much Home Does the FHA Think I Can Afford?

The FHA has found over time that the typical home owner can afford to spend about 29% of their gross monthly income (their income before taxes have been deducted) on a mortgage payment.  The mortgage payment they are talking about not only includes principal and interest but also includes taxes and home owner’s insurance.  This allows enough income for the home owner to be able to afford their other monthly debts as well. 

The 29% rule is not a hard line.  Depending on the amount of monthly debt, home buyers may be allowed to budget even more than 29% of their gross monthly income for their mortgage payment.  Home buyers with no debt can be allowed to budget as much as 41% of their gross monthly income for a house payment.

FHA Home Affordability Chart

The following chart can be used to determine potential FHA mortgage payment budgets based on income: