How Much Monthly Payment Can I Possibly Qualify For? (FHA Simple Explanation)

What FHA Looks At (Very Simple)

FHA compares:

• Your gross monthly income (before taxes)

• Against your monthly debts

• To decide your maximum allowed house payment

They do not use:

• Take-home pay

• Bank balance

• What you want to pay

They use math.

Two FHA Approval Paths (Important)

1️⃣ Manual Underwriting

Typically (not always) used when:

• Credit scores are below 620

• More conservative rules apply

FHA Manual Limits:

• 31% front-end (housing only)

• 43% back-end (housing + all debts)

• 
  

2️⃣ AUS Approval (Automated)

Typically (not always) used when:

• Credit scores are 620 or higher

• More flexibility is allowed

FHA AUS Limits:

• Up to 44% front-end

• Up to 57% back-end

The back-end ratio usually controls how much payment you qualify for.

Step-by-Step: Find Your Maximum Monthly FHA Payment

We’ll go slow.

Step 1: Find Your Gross Monthly Income

This is your income before taxes.

Example:
$72,000 per year ÷ 12 = $6,000 per month

Step 2: Apply FHA’s Back-End DTI Limit

Manual Underwrite (43%)

$6,000 × 43% = $2,580

AUS Approval (57%)

$6,000 × 57% = $3,420

This number represents ALL monthly debt combined, including the house.

Step 3: Subtract Your Current Monthly Debts

Example monthly debts:

• Car payment: $450

• Student loans: $300

• Credit cards: $150

Total monthly debts: $900

Step 4: What’s Left Is Your Max FHA Housing Payment

Manual Underwrite:

$2,580 − $900 = $1,680

AUS Approval:

$3,420 − $900 = $2,520

👉 This is the maximum total house payment FHA may allow.

What “House Payment” Actually Includes

Your FHA monthly payment is not just the mortgage.

It includes:

• Principal & interest

• Property taxes

• Homeowners insurance

• FHA mortgage insurance

All of that must fit inside the number above.

Very Important Reality Check

Just because FHA allows a payment doesn’t mean it’s smart to use the full amount.

Experienced lenders usually recommend:

• Staying below the maximum

• Leaving room for life expenses

• Planning for taxes and insurance to increase

Why This Step Comes First

If you know:
✔ Your income
✔ Your monthly debts
✔ Your FHA approval path

Then you already know:

• Your payment ceiling

• Whether a home is realistic

• If house shopping makes sense right now

For Real Estate Agents

This is the math that:

• Prevents over-shopping

• Reduces failed contracts

• Sets clean expectations

Sending buyers here before showings saves everyone time.

The One Thing to Remember

FHA qualifying starts with monthly payment — not home price.

Once this number is clear, everything else becomes simple.

Reach out to me so we can put that maximum monthly house payment amount to a Real Life Home Purchase! 

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