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Independent editorial. Not a lender, broker, or financial advisor.
Methodology and Sources
Where the DTI ceilings, MIP / PMI rates, loan limits, and rate observations on this site come from. Last full-source pass: May 2026.
01. Primary and named sources
Each row identifies the source, how often we re-check it, and what we take from it. Pricing tables, DTI ceilings, loan limits, and program rules trace to a primary source. Where we cite a rate observation, the source is the Freddie Mac PMMS national survey.
| Source | Refresh cadence | What we take from it |
|---|---|---|
| CFPB Ability-to-Repay and Qualified Mortgage rule (12 CFR 1026.43) | On CFPB rulemaking | Ability-to-Repay framework; 43% back-end DTI ceiling for the Qualified Mortgage safe harbour; eight ATR underwriting factors lenders must verify. |
| Fannie Mae Selling Guide (B3-6 DTI Ratios; B5-6 HomeReady) | Quarterly + on Selling Guide bulletin | Conventional back-end DTI policy (50% max via Desktop Underwriter), HomeReady 3% down income limits, gift fund rules, asset reserve requirements. |
| Freddie Mac Single-Family Seller / Servicer Guide (Section 4501.7 Home Possible) | Quarterly + on Guide bulletin | Loan Product Advisor DTI policy, Home Possible 3% down income limits, manual underwriting framework. |
| FHA Single Family Housing Policy Handbook 4000.1 | On HUD Mortgagee Letter | FHA DTI ceilings (43% TOTAL Scorecard, up to 50%+ manual with compensating factors), MIP schedule (0.55% annual at standard term + 1.75% upfront), 580 minimum FICO for 3.5% down, Minimum Property Standards. |
| VA Lenders Handbook (Pamphlet 26-7) | On VA Circular | VA residual income tables by region and family size, funding fee schedule (2.15% first use, 3.30% subsequent), no PMI / no down payment policy, Certificate of Eligibility process. |
| USDA Single Family Housing Guaranteed Loan Program Handbook (HB-1-3555) | On USDA Administrative Notice | USDA Rural Development eligible-area rules, 29 / 41 ratios, GUS automated underwriting framework, annual fee + upfront guarantee fee schedule. |
| FHFA Conforming Loan Limit announcement | Annual (November) | 2026 conforming limit ($832,750 single-family base, $1,249,125 high-cost ceiling) used in jumbo vs conforming demarcation. |
| Freddie Mac Primary Mortgage Market Survey (PMMS) | Weekly (Thursday) | 30-year fixed and 15-year fixed national average rate observation. The April 2026 PMMS prints (6.37% 30-year, 5.60% 15-year) anchor the credit-score rate-band tables and the 2026 rates reference page. |
| MBA Mortgage Finance Forecast | Monthly | Origination volume and rate-path expectations used in editorial framing (not in calculator output). |
| BLS Consumer Price Index (CPI) shelter component | Monthly | Shelter inflation framing for the buy-vs-rent context and the long-term affordability discussion (not in calculator output). |
| HUD FHA mortgage limit lookup (county) | Annual + on HUD update | FHA floor ($541,287) and ceiling ($1,249,125) limit references and county-level lookups cited on the FHA pre-approval page. |
02. In scope and out of scope
In scope
- +DTI ratio computation: front-end (housing only), back-end (housing + recurring debts), what counts and what does not.
- +Loan-program DTI ceilings: 43% Qualified Mortgage / up to 50% conventional via DU; 43% / 50%+ FHA with compensating factors; 29 / 41 USDA; VA residual income test.
- +MIP / PMI math: FHA MIP 0.55% annual + 1.75% upfront; conventional PMI 0.30 to 1.50% annual by credit / LTV; FHA MIP life-of-loan if <10% down vs 11 years if 10%+ down.
- +FHA, VA, USDA, and conventional limit references at the 2026 levels announced by FHFA and HUD.
- +Conforming vs jumbo demarcation and pricing-band framing.
- +ATR / QM compliance framing for which borrower profiles fall inside the QM safe harbour vs outside.
Out of scope
- -Lender-specific overlays (each lender layers its own credit, asset, and employment overlays on top of the GSE / FHA / VA / USDA selling-guide floors).
- -Non-QM bank-statement, asset-depletion, DSCR investor, and 1099-only loan programs (pricing and underwriting are lender-by-lender and not standardised).
- -Individual lender rate sheets, daily lock-desk pricing, or float-down terms.
- -Jumbo-segment lender pricing, large-balance pricing tiers, and portfolio-product underwriting.
- -Complete state and local Down Payment Assistance (DPA) program lists (these change frequently and vary by county / city / HFA; we link to the umbrella programs but do not maintain a full registry).
- -Itemised closing-cost and escrow analysis at the lender / state level (third-party fees, title, recording, and transfer tax vary materially by location).
03. Calculation framework
DTI formula
Front-end DTI = housing PITI / gross monthly income. Back-end DTI = (housing PITI + recurring debts) / gross monthly income. Recurring debts: car / lease, student loans (0.5% of balance if deferred per Fannie / 1% Freddie), credit card minimums, personal loans, child support, alimony. Excluded: utilities, insurance other than homeowner / PMI / MIP, groceries, subscriptions.
Worked example at $90K income
Gross monthly $7,500. At 43% back-end ceiling: $3,225 total debt capacity. Subtract $850 in existing debts -> $2,375 available housing. Net of escrow (taxes ~1.1% of home value, insurance ~$1,800/yr, PMI / MIP if applicable), roughly $1,800 to $1,950 remains for P&I. At 6.37% on a 30-year, that supports approximately a $290K to $310K loan.
Credit-score rate bands
Bands taken from Freddie Mac PMMS national average rate plus the credit-score pricing-adjustment pattern observed in the GSE / FHA Loan-Level Price Adjustment matrix. The April 2026 760+ band sits at approximately 6.00% and the 620-639 band at approximately 7.50% on a 30-year conventional fixed.
Down payment + PMI math
Conventional PMI auto-terminates at 78% LTV and is requestable at 80% (HPA, 12 USC 4901-4910). FHA MIP terminates after 11 years if 10%+ down, otherwise life of loan (HUD Mortgagee Letter 2013-04). Tables shown at 3% / 3.5% / 5% / 10% / 20% with corresponding PMI / MIP and total monthly PITI under standard tax / insurance / 30-year amortisation assumptions.
FHA MIP schedule
Annual MIP 0.55% for the standard 30-year, LTV > 95%; lower bands apply at shorter terms or lower LTV per Handbook 4000.1 Section II.A.5. Upfront MIP 1.75% of the base loan amount, typically financed into the loan. The life-of-loan rule applies if down payment is below 10%.
VA residual income test
VA requires a minimum residual income after PITI, debts, and an estimated maintenance / utility allowance. Tables by region and household size per Pamphlet 26-7 Chapter 4. The residual income test often controls VA approvals more than the DTI ratio because the VA's 41% guideline is an indicator, not a hard cap.
04. Refresh cadence
A full source pass runs during the first business week of each month. The visible footer date stamp, Article schema dateModified, and WebSite schema dateModified all read from a single LAST_VERIFIED constant in src/lib/schema.ts so freshness signals stay in lockstep across the site.
Out-of-cycle refresh triggers:
- Freddie Mac PMMS observation shifts more than 0.50% between two consecutive Thursdays (re-anchor the rate-band tables).
- FHA Handbook 4000.1 revision via HUD Mortgagee Letter affecting DTI, MIP, or property standards.
- FHFA Conforming Loan Limit announcement (annual, typically late November) shifts the conventional and high-cost FHA limits.
- CFPB ATR / QM rulemaking (proposed or final rule).
- Fannie Mae or Freddie Mac Selling-Guide bulletin shifting DTI policy, HomeReady / Home Possible income limits, gift / asset rules, or LLPA tables.
05. Limitations
- Calculator outputs are planning anchors, not pre-approval commitments. A lender's actual pre-approval letter depends on full credit-pull verification, income / asset documentation, employment verification, and underwriting review.
- Lender overlays on top of the GSE / FHA / VA / USDA selling-guide floors vary by lender and can be stricter than the published program rules (especially on minimum credit score, reserves, and DTI).
- Rate-lock terms and float-down windows differ by lender; the calculator does not model lock fees, extension fees, or float-down pricing.
- Final approval is conditional on the property appraising at or above the contract price, clean title search, hazard insurance in place, and unchanged employment / financial status through closing.
- Per-state DPA program lists are not maintained in full here; check your state HFA and city / county programs for current availability.
06. Corrections process
If a DTI ceiling, MIP rate, conforming limit, funding fee, or rate citation looks wrong, email [email protected] with the page URL and the source you are citing. We aim to acknowledge within 5 business days and publish the fix the same working week. See /about for editorial position and disclosures.