DTI Requirements by Loan Type

Different mortgage programs have varying DTI limits. Here's what Nevada lenders typically allow for each loan type

Conventional Loans

43%
Maximum DTI
Standard max is 43% for qualified mortgages
Up to 50% with strong compensating factors
Lower DTI = better interest rates

FHA Loans

43%
Standard Maximum
43% standard limit with automated underwriting
Up to 56.9% with manual underwriting and compensating factors
More flexible than conventional

VA Loans

41%
Guideline (Flexible)
41% is guideline, not a hard limit
Higher DTI allowed with sufficient residual income
VA uses unique residual income calculation

What Counts as Debt?

Included in DTI

  • Mortgage payment (PITI)
  • Auto loan payments
  • Student loan payments
  • Credit card minimum payments
  • Personal loan payments
  • Child support/alimony
  • Other mortgage/rent payments

NOT Included

  • Utilities (electric, water, gas)
  • Cell phone bills
  • Cable/internet
  • Groceries/food
  • Insurance (health, auto, life)
  • Entertainment/subscriptions
  • Transportation/gas

Special Cases

  • Installment loans: Counted if 10+ months remaining
  • Co-signed loans: Counted unless proven paid by other party
  • Student loans in deferment: 0.5%-1% of balance used
  • Business debts: Only if personally liable

What is Debt-to-Income Ratio?

DTI ratio is the percentage of your gross monthly income that goes toward debt payments. Lenders use this metric to determine how much house you can afford and whether you qualify for a mortgage in Nevada.

Front-End DTI Ratio

Also called housing ratio, this compares your housing expenses to your gross monthly income. Includes mortgage payment (principal & interest), property taxes, homeowners insurance, and HOA fees if applicable.

Front-End DTI Formula:
(Monthly Housing Costs) ÷ (Gross Monthly Income)
× 100 = Front-End DTI %
Example: $2,000 housing costs ÷ $7,000 income = 28.5%
Ideal front-end DTI: 28% or less

Back-End DTI Ratio

The total debt ratio includes ALL monthly debt obligations: housing costs plus credit cards, auto loans, student loans, personal loans, and other recurring debts. This is the DTI most lenders focus on.

Back-End DTI Formula:
(Total Monthly Debts) ÷ (Gross Monthly Income)
× 100 = Back-End DTI %
Example: $3,000 total debts ÷ $7,000 income = 42.8%
Maximum back-end DTI: 43-50% (varies by loan type)

The 28/36 Rule

A traditional guideline stating that your front-end DTI should be no more than 28% and your back-end DTI should be no more than 36%. While not a hard rule, staying within these limits generally ensures comfortable affordability.

28%
Housing Expenses
Maximum front-end DTI for traditional qualification
36%
Total Debt
Maximum back-end DTI for traditional qualification

Edited and reviewed by CEO Vatche Saatdjian — 30+ years of experience — Expert on FHA loans

DTI RATIO GUIDE

FHA accepts up to 50% DTI—more flexible than you think

Many Nevada buyers worry their debt is too high. FHA allows debt-to-income ratios up to 50% with compensating factors—student loans, car payments, and credit cards don't automatically disqualify you.

FHA Maximum
50%
Back-end
Ideal Range
36%
Preferred
Housing Only
31%
Front-end
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