How Much House Can You Afford With An FHA Loan?

Aug 22, 2024

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A red one-story home with a neatly trimmed lawn and trees, presenting a cozy residential scene.

Whether you’re considering a conventional loan, a government-backed mortgage or another loan type, knowing how much house you can afford will become the foundation of your home buying budget. This key figure can help focus your house hunt and steer initial conversations with mortgage lenders.

Use our guide to figure out what you can afford with a Federal Housing Administration (FHA) loan and what eligibility requirements you’ll need to meet to qualify for this popular government-backed loan option.

FHA Loan Affordability Basics

Prospective home buyers should collect some key financial details upfront to get reliable results from a mortgage calculator.

  • Down payment: FHA loan borrowers will make at least a 10% down payment if their credit score ranges from 500 – 579. With a 580 credit score or higher, borrowers can make as little as a 3.5% down payment.
  • Loan value: If you’re buying a property in an FHA-designated low-cost area, the mortgage limit for a one-unit property is $524,225. In a high-cost area, the FHA 2025 loan limit is $1,209,750.
  • Interest rate: Most mortgage or home affordability calculators typically require an interest rate. For most of 2024, FHA 30-year fixed rates have ranged from 6% – 7%. Your credit score and financial profile will also affect the rate a lender offers.
  • Monthly debt: Lenders use recurring monthly debt payments to help calculate your debt-to-income ratio (DTI). Lenders concentrate on a borrower’s DTI ratio because it helps them assess whether you can afford a monthly mortgage payment on top of your existing debts. Lenders typically require a DTI ratio of 45% or less to qualify for an FHA loan.

Even educated estimates for these key financial figures can provide a reasonably accurate idea of future monthly mortgage payments, helping you determine how much house you can afford with an FHA loan.

Mortgage Affordability Calculator

The Rocket Mortgage® home affordability calculator is a valuable tool that helps borrowers gauge how much house they can afford.

The calculator takes location, annual income, monthly debts, down payment and closing costs into account to suggest a home price that should work with your home buying budget.

See What You Qualify For