US FinPulse • Deterministic Financial Models

Home Affordability Calculator (Fannie Mae & CFPB Standards)

Estimate how much house you can afford in the US based on your annual household income, recurring monthly debt obligations, and down payment savings.

The 28/36 Debt-to-Income (DTI) Underwriting Standard

Conventional mortgage lenders, Fannie Mae, and Freddie Mac utilize debt-to-income (DTI) ratios to evaluate mortgage applicants:

  • Front-End DTI Ratio (28%): Your total monthly housing expenses (PITI: Principal, Interest, Taxes, and Insurance) should not exceed 28% of your gross monthly income.
  • Back-End DTI Ratio (36%): Your total monthly debt obligations (housing PITI plus auto loans, student loans, and minimum credit card payments) should not exceed 36% of your gross monthly income.

Frequently Asked Questions

How does recurring debt impact home affordability?

Every dollar of existing recurring debt reduces your available housing borrowing power dollar-for-dollar. For example, a $500 monthly car payment can reduce your maximum mortgage borrowing capacity by roughly $76,000 at current interest rates.