By the end of this guide you will have a completed FHA mortgage affordability worksheet: a realistic price range and a full monthly payment that includes mortgage insurance and property taxes. Most worksheets stop at income and debt ratios, which is where FHA payments get understated. Before you start, gather your last two pay stubs, your last two years of W-2s or tax returns, a list of your monthly debts, and a rough credit score estimate. A calculator and a pencil are enough. One example runs through every step, and the regulatory figures were last checked in October 2026.
Step 1: Total Your Gross Monthly Income
Use gross income, meaning pay before taxes and deductions. FHA underwriting ratios are built on gross income, not take-home pay, so starting from your deposits will make you look less qualified than you are.
- Salaried: annual pay divided by 12.
- Hourly: hourly rate x average weekly hours x 52 / 12. For example, $27 an hour at 40 hours a week is $27 x 40 x 52 / 12 = $4,680 per month.
- Variable income: overtime, bonuses, commission, and self-employment income are generally averaged over about two years and must be documented. Use your tax returns and year-end pay stubs to calculate that average.
List only what you can document. Cash side income, informal gigs, and gifts that never show up in a deposit trail or tax return cannot be used to qualify, and including them inflates your worksheet beyond what an underwriter will accept.
For the example in this guide, suppose a salaried buyer earns $69,600 a year.
Worksheet line 1: Gross monthly income = $5,800.
Step 2: List Every Monthly Debt That Appears on Your Credit Report
Write down the required monthly payment for each of these:
- Car loans and leases
- Student loans
- Credit card minimum payments (not the balance, not what you usually pay)
- Personal loans
- Child support or alimony
Leave out utilities, groceries, insurance premiums, phone bills, and streaming subscriptions. They are real expenses, but they are not part of the debt-to-income calculation. Your budget in Step 7 will cover them.
Student loans in deferment or income-driven repayment need care. Underwriters apply specific rules for how those payments are counted, and a payment of $0 on your statement does not always mean $0 on the worksheet. Duane Buziak advises confirming how your payment will be counted rather than entering zero and hoping.
Debts you forgot are the usual surprise. Pull your free reports at AnnualCreditReport.com and compare them with your list. An old store card or a medical collection can change your ratio.
In the example, the buyer has a $375 car payment, a $190 student loan payment, and $85 in credit card minimums.
Worksheet line 2: Total monthly debts = $650.
Step 3: Apply the FHA Debt-to-Income Guidelines
Two ratios matter. The front-end ratio is your proposed housing payment divided by gross monthly income. The back-end ratio is your housing payment plus all monthly debts, divided by gross monthly income.
The commonly cited FHA benchmarks are 31% front-end and 43% back-end. They are benchmarks, not hard walls. HUD Handbook 4000.1 permits higher ratios when compensating factors are documented, and loans that receive an automated approval can qualify above them. Rules change, so check the current underwriting language in Handbook 4000.1 (as of October 2026) or ask Duane Buziak how your file would be evaluated.
Run both calculations with the example:
- Line 3, front-end limit: 31% x $5,800 = $1,798 maximum housing payment.
- Line 4, back-end limit: 43% x $5,800 = $2,494, minus $650 in debts = $1,844 maximum housing payment.
- Line 5, conservative target: the lower of lines 3 and 4 = $1,798.
Use the lower number as your planning target. An approval ceiling tells you the most a file can qualify for, not the payment that leaves room to live. Many buyers who confuse the two end up house-poor, so treat the higher approved amount as a limit you probably do not want to reach.
Your housing payment here means everything: principal, interest, mortgage insurance, property taxes, homeowners insurance, and any HOA dues. The next three steps build that number.
Step 4: Set Your Down Payment and Check Your Credit Tier
Your credit score determines the minimum down payment. Per Handbook 4000.1 (as of October 2026):
- 580 and above: 3.5% minimum down payment
- 500 to 579: generally 10% down
Scores below 500 do not qualify for FHA financing. Your lowest-middle score across the three bureaus is what counts for the tier, so a rough estimate from a free app is a starting point only. A credit check is needed to confirm your tier. Duane Buziak uses a NoTouch Credit Pull, a soft pull with no hard inquiry, so you can see where you stand without a ding on your score.
Down payment funds can come from savings, and gift funds are allowed from acceptable donors such as family members, with a gift letter and a documented transfer. The money has to be traceable. Cash that appears in your account the week before you apply raises questions.
Decide how much of your cash goes to the down payment, because that cash also has to cover closing costs and leave reserves. Down payment dollars and reserve dollars are the same dollars. Draining savings to hit 3.5% can leave you one repair away from trouble. Closing costs can sometimes be negotiated or structured through no-out-of-pocket closing options, which is worth discussing before you decide how much cash to commit.
For the example, assume a score above 580 and a $300,000 purchase with 3.5% down, or $10,500.
Worksheet line 6: Down payment = 3.5% of price.
Step 5: Estimate the Mortgage Insurance Cost (UFMIP and Annual MIP)
Mortgage insurance is not optional on an FHA loan, and leaving it off the worksheet is the most common way FHA payments get understated. There are two parts.
- Upfront MIP (UFMIP): 1.75% of the base loan amount, per HUD Mortgagee Letter 2015-01. You can pay it at closing or finance it into the loan.
- Annual MIP: a yearly premium paid in monthly installments. The rate depends on loan term, loan-to-value (LTV), and base loan amount.
The tier most buyers fall into, as of October 2026 and per HUD Mortgagee Letter 2023-05:
- 30-year term, LTV above 95%, base loan at or below $726,200: UFMIP 1.75%, annual MIP 0.55%
- 30-year term, LTV above 95%, base loan above $726,200: UFMIP 1.75%, annual MIP 0.75%
Across all tiers, annual MIP runs from 0.15% to 0.75%. Check the full schedule in Handbook 4000.1, Appendix 1.0, on the HUD handbook page. With less than 10% down, annual MIP generally lasts for the life of the loan.
Worked math on the $300,000 purchase with 3.5% down:
- Base loan: $300,000 x 96.5% = $289,500
- UFMIP: $289,500 x 1.75% = $5,066.25
- Annual MIP: $289,500 x 0.55% = $1,592.25 per year, about $132.69 per month
If you finance the UFMIP, your loan balance becomes $294,566.25, though annual MIP is still figured on the base loan, and the exact monthly figure depends on how HUD computes the average balance. Treat $132.69 as a close estimate.
Worksheet line 7: UFMIP = 1.75% of base loan. Line 8: monthly MIP = base loan x annual rate / 12.
Step 6: Add Property Taxes and Homeowners Insurance for Your County
Use the actual assessor rate for the county where you are shopping, not a national average. Rates used by Duane Buziak for Virginia buyers, per each county’s published rate (verify current rates before relying on them):
- Henrico: $0.85 per $100 of assessed value (henrico.us)
- Chesterfield: $0.89 per $100 (chesterfield.gov/823)
- Hanover: $0.81 per $100 (hanovercounty.gov/386)
- Stafford: confirm the current rate at staffordcountyva.gov before using it
Worked math in Henrico: $300,000 x $0.85 / 100 = $2,550 per year, or $212.50 per month. The county taxes the assessed value, which can differ from your purchase price, so check the property’s assessment too.
Homeowners insurance varies by home age, roof, claims history, and location, so get a real quote instead of assuming a flat number. Coastal and flood-zone properties cost more, and flood insurance may be required on top of the standard policy. For the illustrations below, this guide assumes $150 per month. That figure is a placeholder, not a quote.
If the home has HOA dues, add them to the housing payment. They count toward your ratios.
Buying in Florida, Tennessee, Georgia, or Washington, DC? Rates and exemptions differ, so use the local assessor. In Florida, the homestead exemption under Florida Statute 196.031 generally depends on owning and living in the home as of January 1, so it typically does not reduce your first-year bill, and your taxes may reset toward the purchase price.
Worksheet line 9: Monthly taxes + monthly insurance + HOA.
Step 7: Solve for Your Price Range and Check It Against the FHA Loan Limit
Now work backward from your target. This example uses a sample interest rate of 6.50% on a 30-year fixed loan, chosen only for illustration. It is not a current market rate; Duane Buziak can price your actual scenario.
The full payment on a $300,000 home in Henrico
- Principal and interest on $294,566.25 at 6.50%: about $1,861.87
- Annual MIP: $132.69
- Property taxes at $0.85 per $100: $212.50
- Homeowners insurance (placeholder): $150.00
- Total: about $2,357 per month
Against the example income, that is a front-end ratio near 41% and a back-end ratio near 52%. This buyer is outside the 31/43 benchmarks. Income of roughly $7,000 to $7,600 a month would fit this payment under them.
Solving for the price that fits $5,800 a month
Subtract the $150 insurance from the $1,798 target, leaving $1,648. Each $1 of price adds about $0.0074 per month in principal, interest, MIP, and taxes at these assumptions, so $1,648 / 0.0074 is roughly $224,000. At the $1,844 back-end limit, the figure is closer to $230,000. A price range of about $224,000 to $230,000 is the benchmark-based answer. An automated approval could allow more, but that is a decision about risk, not a promise of comfort.
Check the result against the 2026 FHA one-unit limits: a floor of $541,287 and a ceiling of $1,249,125, per HUD Mortgagee Letter 2025-23 (as of October 2026; confirm your county at the hud.gov loan limit lookup). This price range sits well under the floor.
Finally, stress test. Add a monthly buffer of 1% to 2% of the home’s value per year for maintenance, and see whether you still have reserves left. If the payment strains your budget, lower the price. The CFPB home-buying tools can help you sanity-check the rest of your budget. Then bring the completed worksheet to Duane Buziak for a pre-approval review.
Common Questions About Using an FHA Affordability Worksheet
How much house can I afford with an FHA loan?
It depends on gross income, monthly debts, down payment, credit tier, and local taxes. The worksheet above turns those into a price range. In the example, $5,800 of gross income supports roughly $224,000 to $230,000 at the 31/43 benchmarks.
Is the 31/43 rule a hard FHA limit?
No. It is a common benchmark. Higher ratios can be allowed with compensating factors or an automated approval, but a higher ceiling does not mean a comfortable payment.
Does FHA use gross or take-home pay?
Gross monthly income, before taxes and deductions.
Is FHA mortgage insurance optional?
No. Every FHA loan carries both UFMIP and annual MIP. Budget for both.
What credit score do I need for FHA?
580 for the 3.5% minimum down payment. Scores from 500 to 579 generally require 10% down. A soft-pull NoTouch Credit Pull can confirm your tier without a hard inquiry.
Can gift money be used for the down payment?
Yes, from acceptable donors with a gift letter and documented transfer.
Are student loans in deferment counted?
Often yes. Underwriters apply specific payment rules, so confirm how yours will be counted rather than entering $0.
Is FHA Mortgages by Duane Buziak a lender?
No. Duane Buziak works as a mortgage broker with access to hundreds of wholesale lenders, which lets him compare options for your FHA scenario instead of offering a single shelf.
Keeping Your FHA Worksheet Current as Rates, Debts, and Income Change
A worksheet is a snapshot. Redo it when interest rates move, when you pay off or take on a debt, and when your income changes. A paid-off car loan can raise your price range noticeably, and a new one can lower it just as fast.
When the numbers look right, the next move is to turn them into a documented pre-approval. FHA Mortgages by Duane Buziak is a mortgage broker, not a lender, with access to hundreds of wholesale lenders, a Dare to Compare pricing challenge, a NoTouch Credit Pull (soft pull, no hard inquiry), and no-out-of-pocket closing options to discuss for your purchase.
Ready to take the first step toward homeownership with an FHA loan tailored to your needs? Schedule your free consultation today and discover how Duane Buziak can help you navigate the path to your new home with competitive rates and expert guidance. Call 804-212-8663 or visit 4860 Cox Rd, Glen Allen, VA 23060. Coast2Coast Mortgage LLC, NMLS #1110647, licensed in FL, GA, KY, MD, NC, SC, TN, TX, VA, WV, and DC.
One Response