# Housing ratio (front-end ratio)

> The housing ratio, or front-end ratio, is your full monthly housing payment divided by gross monthly income. Which loans use it and how to work it out.

URL: https://mail.mortgage-math-us.com/glossary/housing-ratio/  
Last reviewed: 2026-10-29 · By the MortgageMath US Editorial team

## Quick answer

The **housing ratio**, or front-end ratio, is your monthly housing payment (principal, interest, property taxes, homeowners insurance, mortgage insurance and any HOA dues) divided by your gross monthly income. FHA uses 31% as its guideline on manually underwritten loans, and Freddie Mac suggests keeping housing costs below 30%.

## Key facts

| Fact | Value | Source | As of |
|---|---|---|---|
| FHA, manual underwriting | 31% | [HUD Mortgagee Letter 2026-11](https://www.hud.gov/sites/default/files/hudclips/documents/2026-11hsgml.pdf) | Oct 8, 2026 |
| USDA guaranteed loans | 29% | [USDA Rural Development, HB-1-3555 Chapter 11](https://www.rd.usda.gov/files/3555-1chapter11.pdf) | Nov 25, 2025 |
| Freddie Mac suggested ceiling | 30% | [Freddie Mac My Home](https://myhome.freddiemac.com/blog/homebuying/how-much-can-you-afford) | Jan 22, 2026 |

## Example: income for a median-priced home

On a $360,000 home with 10% down at 7.24%, with property tax at the national effective rate of 0.89% and average insurance, the full payment comes to about $2,784 a month: $2,208 principal and interest, $267 tax, $147 insurance and $162 mortgage insurance. Keeping that under 30% of income takes about $9,280 a month, or $111,000 a year.

## Which loans test it

FHA manual underwriting (31%) and USDA (29%) set housing ratio limits. Fannie Mae and Freddie Mac’s rules cap only the total [debt-to-income ratio](https://mail.mortgage-math-us.com/glossary/debt-to-income-ratio/), so on a conventional loan the housing payment matters through that total. Even where no lender limit applies, the front-end ratio is a quick budget check: the more of your income the payment takes, the less room for [reserves](https://mail.mortgage-math-us.com/glossary/reserves/) and everything else. Run your own numbers in the [affordability calculator](https://mail.mortgage-math-us.com/tools/affordability-calculator/).

## Related terms

- [PITI](https://mail.mortgage-math-us.com/glossary/piti/) and [escrow account](https://mail.mortgage-math-us.com/glossary/escrow-account/)

## Sources

- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25077?g=010XX00US) — Median value of owner-occupied homes (2024 ACS 1-year)
- [Freddie Mac Primary Mortgage Market Survey](https://www.freddiemac.com/pmms) — 30-year fixed rate, national weekly average (Week of Oct 29, 2026)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25103?g=010XX00US) — Effective property tax rate (median taxes ÷ median home value) (2024 ACS 1-year)
- [Freddie Mac Research](https://www.freddiemac.com/research/insight/homeowners-insurance-costs) — Average homeowners insurance premium per $1,000 of home value (2023 data)
- [Freddie Mac My Home](https://myhome.freddiemac.com/buying/breaking-down-pmi) — Typical PMI cost, low end; Typical PMI cost, high end (Oct 28, 2026)
- [Freddie Mac My Home](https://myhome.freddiemac.com/blog/homebuying/how-much-can-you-afford) — Freddie Mac guidance: housing costs below this share of gross income (Jan 22, 2026)
- [HUD Mortgagee Letter 2026-11](https://www.hud.gov/sites/default/files/hudclips/documents/2026-11hsgml.pdf) — FHA manual underwriting housing ratio (no compensating factors) (Oct 8, 2026)
- [USDA Rural Development, HB-1-3555 Chapter 11](https://www.rd.usda.gov/files/3555-1chapter11.pdf) — USDA guaranteed loan: housing payment ratio (share of repayment income) (Nov 25, 2025)
- [Fannie Mae Selling Guide B3-6-02: Debt-to-Income Ratios](https://selling-guide.fanniemae.com/sel/b3-6-02/debt-income-ratios)

_General information, not financial advice._