FHA Loan Income Requirements - Updated for 2025
Do FHA Loans Have Income Limits?
Many homebuyers wonder if they make too much to qualify for an FHA loan. Fortunately, FHA does not have income limits. You could make $1 million per year and still be eligible.
This sets FHA apart from other loans like USDA, and from various down payment assistance programs which do have limits.
FHA loans do not have minimum income limits, either. You just need to make enough to qualify for the house payment and service all other debts.
No matter what your situation, your income level plays an important role when qualifying for an FHA mortgage. We'll review everything you need to know about how your income impacts FHA loan eligibility, even for self-employed and part-time workers.
Key Takeaways
FHA loans do not have any minimum or maximum income requirements
While there are no FHA income limits, your income determines how much you qualify for
Most borrowers will need to verify their income with recent paystubs, W-2s, and filed federal tax returns. Self-employed applicants may face other requirements
You can use part-time income to qualify for an FHA loan but expect extra scrutiny from lenders
Debt-To-Income Ratio: The Closest Thing To FHA Income Limits
Debt-to-income, or DTI, represents the portion of your income needed to cover debt payments each month for things such as:
Auto loans
Credit card minimums
Court-ordered obligations
For example, someone with an $8,000 monthly income with total debts (including the full housing payment) of $4,000 would have a DTI of 50%.
While maximum acceptable DTI ratios can vary by lender, FHA guidelines allow borrowers to have a total DTI as high as 56.9%, but more like 45-55% in most cases. Compared to conventional loans, which have a maximum allowable DTI of 43-50%, you may be able to qualify for a larger mortgage through the FHA.
Definitions:
Front-End DTI: Your total housing expense, including the mortgage payment, taxes, insurance, and HOA dues.
Back-End DTI: Your total housing expense plus monthly debt payments
How Much FHA Loan Can You Afford Based on Your DTI?
So how much FHA loan can you afford based on your DTI? Let’s run through a few scenarios with varying income levels and the monthly payments you may qualify for.
DTI limits can vary by lender. While the FHA sets a maximum total debt-to-income ratio, allowable back-end limits and caps on housing DTI will depend on the mortgage company you're working with. For our examples, we assume a maximum front-end DTI of 40% and a back-end DTI of 50%.
Note: The home price or mortgage amount you qualify for depends on interest rates at the time, local property tax and homeowners insurance rates, and whether the property requires HOA dues. Below we give full payment estimates. Use a mortgage calculator and review local tax and insurance costs to determine what home price you might qualify for.
Example #1: $50,000 Annual Income
A $50,000 annual income translates into $4,167 in monthly qualifying income. This equates to a housing expense (40%) limit of $1,667 and a total debt (50%) limit of $2,083.
In this scenario, you might qualify for a monthly mortgage payment of $1,667 – including property taxes and homeowners insurance – and have up to $416 in other monthly debt payments.
Monthly obligations in excess of $416 would lower your maximum allowable housing expense:
Existing Monthly Debt | Maximum Housing Expense |
$500 | $1,583 |
$600 | $1,483 |
$750 | $1,333 |
It’s clear to see that having low debt enables you to buy a more expensive home.
Example #2: $70,000 Annual Income
A $70,000 annual income translates into $5,833 in monthly qualifying income. This equates to a housing expense (40%) limit of $2,333 and a total debt (50%) limit of $2,916.
In this scenario, you might qualify for a mortgage payment of $2,333, inclusive of property taxes and homeowners insurance, and have up to $583 in other monthly installment debts.
Monthly obligations above $583 would lower your maximum allowable housing expense:
Existing Monthly Debt | Maximum Housing Expense |
$650 | $2,266 |
$750 | $2,166 |
$900 | $2,016 |
Example #3: $100,000 Annual Income
A $100,000 annual income translates into $8,333 in monthly qualifying income. This equates to a housing expense (40%) limit of $3,333 and a total debt (50%) limit of $4,166.
In this scenario, you might qualify for a housing expense of $3,333 and have up to $833 in other monthly installment debts.
Monthly obligations exceeding $833 would lower your maximum allowable housing expense:
Existing Monthly Debt | Maximum Housing Expense |
$1,000 | $3,166 |
$1,250 | $2,916 |
$1,500 | $2,666 |
Income Verification for an FHA Loan
Lenders want to see two years of steady employment and income history. This doesn't necessarily need to be with the same employer, but it should be in the same line of work.
Similarly, your income level does not need to be the same from month to month so long as it remains steady over time. This could apply to someone who does seasonal work or earns income from commissions that may have predictably slow and busy times throughout the year.
Variable income generally needs two years of history to form an average.
Documents Required for FHA Income Verification
The FHA income verification process will involve your lender asking for an assortment of documents to ensure that your income is both steady and stable. Some of the items that you’ll likely be required to provide include:
Current paystubs
Two years of W-2 forms
Two years of filed federal tax returns if self-employed
Two months of bank statements
Investment account statements
Alimony or child support documentation
Recent technological advances within the mortgage industry may even allow for automated income verification, letting lenders verify your income and employment history without requiring you to provide any physical or scanned documents.
FHA Income Verification for the Self-Employed
FHA loan income requirements for self-employed borrowers are similar to those for traditionally employed applicants in that they'll need to prove two years of consistent income generation. This applies to self-employed business owners and borrowers who work as freelancers or independent contractors.
If your income – or part of your income if you are both self-employed and also maintain a W-2 job – comes from self-employment, you may be expected to provide:
Two years of personal tax returns
Two years of business tax returns
Profit and loss statements
Most recent balance sheet
Business license or CPA letter
Self-employed borrowers typically need two full years of filed tax returns to be eligible for an FHA loan. In some cases, however, it may be possible to qualify with one full year of documentation if you recently transitioned into self-employment from W-2 employment in the same industry and from a position with similar responsibilities to your current venture.
FHA Income Verification for Part-Time Jobs
Qualifying for an FHA loan is also possible based on earnings from a part-time, second, or seasonal job. However, lenders tend to be a little more cautious when using this type of income as it can often be less predictable than traditional full-time employment.
Part-time workers hoping to meet the income requirements for FHA loans can expect to need a full two years of employment, with lenders averaging their income over the previous 24 months.
For Example: If you earned $14,000 in part-time income in year one and $16,000 in year two, your lender would divide the total of $30,000 by 24 for a monthly part-time qualifying income of $1,250.
Keep in mind, however, that underwriters like to see your income increasing over time – even with part-time employment. If you have two years of work history but earned less in the most recent year, your lender may base their calculations on the lower income level.
Other FHA Loan Requirements to Keep in Mind
When it comes to FHA loan requirements, income is just one of the qualifications that your mortgage provider will be looking at. Some other FHA eligibility guidelines that you’ll need to meet are:
Minimum credit score of 580 (some lenders may accept a score of 500 with a sizable down payment)
Down payment of 3.5% (10% for lower credit borrowers)
You must be purchasing a primary residence that you will occupy within 60 days of closing and plan to live in for at least one year
In addition, all FHA purchase loans require you to obtain an appraisal to verify the property’s current market value. You’ll also be required to pay for mortgage insurance, which includes:
A 1.75% upfront mortgage insurance premium
An ongoing annual mortgage insurance premium (divided evenly among your twelve monthly payments) equal to 0.55% of the loan balance for most borrowers
Skipping Income Verification On an FHA Refinance
The FHA loan income requirements for refinancing your current mortgage are similar to those of FHA purchase loans, with one exception: the FHA streamline refinance.
FHA streamline refinances are a type of low-doc loan that lets you reduce your interest rate when rates drop. You likely won’t have to obtain an appraisal and, in most cases, will not need to undergo a detailed credit check or reverify your income. You must have a current FHA loan in good standing to qualify.
Types of Loans That Do Have Income Limits
While you won't encounter any FHA loan income limits, some other types of popular residential mortgages do have maximums to be aware of.
Fannie Mae HomeReady
The Fannie Mae HomeReady loan is targeted at low-to-moderate earning homebuyers who make no more than 80% of the area median income (AMI) for their locale. HomeReady loans require a minimum credit score of 620 and allow qualifying buyers to purchase with just 3% down.
HomeReady loans have lower interest rates and mortgage insurance costs than typical conventional loans. They are available to both first-time and repeat homebuyers, and they offer additional savings for very low-income borrowers earning less than 50% of AMI.
Freddie Mac Home Possible
The Freddie Mac Home Possible program is nearly identical to the HomeReady loan offered through Fannie Mae. Low-to-moderate income borrowers earning 80% or less of AMI can qualify with 3% down and a credit score of 620.
Your lender may offer either the HomeReady or Home Possible mortgage, depending on which agency they work with.
USDA-Backed Mortgages
Mortgages insured by the US Department of Agriculture are designed to provide affordable financing for low-to-moderate-income borrowers looking to purchase property within USDA-designated rural communities.
USDA loans have maximum income requirements that apply to all adults in the home – not just those on the mortgage – with limits varying by location and household size. These limits equal 115% of the area median income with a base of $112,450 per year in most of the U.S.
See If You Qualify
To get an idea of what kind of monthly payments you may be able to expect, check out our FHA mortgage calculator, which has an option for obtaining a professional estimate for your interest rate and monthly payments.
