Online affordability calculators love the 28/36 rule. Lenders don't use it. A lender sets your maximum price by running your income and debts through the limits of a specific loan program, then checking three more things: how much cash the program needs, the loan limit in your county, and whether your credit score meets the program's floor. The lowest of those answers is your number. Further down, one buyer goes through FHA, Conventional, VA and USDA, and the same paycheck comes out with four different prices.
The four things that cap your price
1. Your debt-to-income ratios. Debt-to-income ratio, or DTI, is a monthly payment divided by gross monthly income (income before taxes). The housing ratio uses the new house payment alone. The total ratio adds every monthly debt on your credit report. The house payment is PITI: principal, interest, property taxes and insurance, plus mortgage insurance and HOA dues. For almost every buyer, this is the limit that sets the price. The debt-to-income ratio guide explains which debts count.
2. Cash. Each program has a minimum down payment, and closing costs come on top. FHA needs 3.5% down at a 580 score and 10% from 500 to 579. Conventional needs 3% on a single-family home. VA and USDA need $0 down. FHA 100% financing removes the down payment entirely: a 96.5% FHA first mortgage plus a down payment assistance second that covers the 3.5%.
3. The county loan limit. FHA and Conventional loans can't exceed the limit set for your county each year. In the lowest-cost areas the 2026 FHA limit for a single-family home is $541,287, and in the highest-cost areas it reaches $1,249,125. The conforming limit for Conventional is $832,750 in most of the country. VA has no loan limit for a veteran with full entitlement. Look up your county on the loan limits page.
4. Credit score. AAA Capital Funding does FHA and VA down to a 500 score and Conventional from 620. The score decides which programs are open to you and, on Conventional, how much the mortgage insurance costs.
Each program's income limits
| Program | Housing ratio | Total DTI | Down payment |
|---|---|---|---|
| FHA | 46.9% | 56.9% | 3.5% at 580+, or $0 with FHA 100% financing |
| Conventional | No separate limit | 50% | 3% single-family |
| VA | No separate limit | 41% guideline, residual income decides | $0 |
| USDA | 29% | 41% | $0 in eligible areas |
The FHA figures are the limits with automated approval through an AUS (automated underwriting system, the software lenders use to apply each agency's rules). VA's residual income is the money left each month after taxes, debts, the house payment and an estimate for upkeep and utilities, measured against a minimum by family size and region. Above 41% DTI, VA wants 20% more residual income than the minimum. USDA's 29% and 41% are the standard ratios, and an automated USDA approval (a GUS Accept) can go higher.
How a lender turns income into a price
Take the FHA limits and a buyer earning $6,000 a month with $625 in monthly debts.
- Housing limit: 46.9% of $6,000 is $2,814.
- Total limit: 56.9% of $6,000 is $3,414. Subtract $625 in debts and $2,789 is left for the house.
The smaller number wins, so this buyer's house payment can be $2,789. The lender then finds the price where principal, interest, taxes, insurance and mortgage insurance add up to $2,789. Each $100 a month of debt takes about $14,000 off an FHA price at 5.75% when the total ratio is the one that binds.
One buyer, four programs
Maria earns $6,000 a month gross, has a 660 credit score, and lives with her two kids. Her debts:
- Car loan: $410 a month
- Credit cards: $85 in minimum payments
- Student loans: $26,000 with a $0 payment
Each program counts that $0 student loan payment its own way: 0.5% of the balance on FHA and USDA ($130), 1% on Conventional ($260), and 5% of the balance divided by 12 on VA ($108.33). For this comparison, assume Maria is a veteran and she's shopping in a USDA-eligible area.
Every example uses a 5.75% 30-year fixed rate, property tax of 0.95% a year (Broward County) and homeowners insurance of $283 a month.
| FHA 100% financing | Conventional 3% down | VA $0 down | USDA $0 down | |
|---|---|---|---|---|
| Highest price | $359,000 | $264,000 | $394,000 | $208,000 |
| Down payment from Maria | $0 | $7,920 | $0 | $0 |
| Loan amount | $352,497.61 | $256,080.00 | $402,471.00 | $210,080.00 |
| Principal and interest | $2,057.08 | $1,494.41 | $2,348.71 | $1,225.97 |
| Taxes and insurance | $567.21 | $492.00 | $594.92 | $447.67 |
| Mortgage insurance or fee | $158.78 | $256.69 | $0 | $61.27 |
| House payment | $2,783.07 | $2,243.10 | $2,943.63 | $1,734.91 |
| Debts counted | $625.00 | $755.00 | $603.33 | $625.00 |
| What sets the limit | Total DTI 56.8% | Total DTI 50.0% | Residual income | Housing ratio 28.9% |
FHA: $359,000 with nothing down
With FHA 100% financing, the $12,565 down payment (3.5%) is covered by the down payment assistance second. The base loan is $346,435, and the 1.75% upfront MIP (mortgage insurance premium) is added to it for a loan of $352,497.61. Annual MIP is 0.55% of the base loan, or $158.78 a month. Maria's housing ratio is 46.4% and her total is 56.8%, just under the 56.9% limit. See the FHA 100% financing guide for how the second loan works.
Conventional: $264,000
Two things hold Conventional down. The total DTI limit is 50%, not 56.9%. And Conventional counts her student loans at $260 instead of $130. Private mortgage insurance (PMI) near a 660 score at 97% loan-to-value (LTV, the loan divided by the price) runs about 1.20% a year, or $256.69 a month. Conventional also needs $7,920 of Maria's own money for the 3% down.
VA: $394,000 with nothing down
The 2.15% funding fee for first use with less than 5% down is added to the loan, for $402,471. VA has no mortgage insurance. Maria's total DTI is 59.1%, well past VA's 41% guideline, so VA wants her residual income at least 20% above the VA residual income table's figure for a family of three in the South region, which comes to $1,066.80. After estimating 18% of her pay for taxes and $300 a month for upkeep and utilities, she has $1,073.04 left. She clears it, and residual income is what stops her at $394,000.
USDA: $208,000 with nothing down
USDA adds a 1% upfront guarantee fee to the loan and charges a 0.35% annual fee. Its 29% housing ratio is the tightest of the four, and it stops Maria at $208,000. An automated GUS Accept can approve higher ratios, so her real USDA number can land above what the standard ratios show.
AAA Capital Funding will run this same side-by-side on your own income and debts. Call 888-601-8344 and you'll see your own four numbers.
What raises the number
A co-signer. Most of the buyers AAA Capital Funding gets approved have a co-signer, and it's the first fix we look at when someone wants more house than their income supports alone. A parent or grandparent can co-sign, even on Social Security or SSI. A co-signer doesn't go on the title and doesn't have to live in the home.
Say Maria's mother receives $1,300 a month in SSI. SSI isn't taxed, so FHA grosses it up 15% to $1,495. Her mother's own $250 a month in property taxes and insurance counts as debt. With her mother on the loan, Maria's FHA price rises from $359,000 to $446,000. On Conventional, where non-taxable income is grossed up 25% and a co-signer loan needs 5% down, it rises from $264,000 to $353,000. Co-signers count on FHA and Conventional. Try it with the co-signer calculator.
Paying off the right debt. Which debt to pay depends on which limit is binding. If Maria paid off her $410 car loan, her FHA price would only move from $359,000 to $363,000, because FHA's 46.9% housing ratio takes over as the limit. The same payoff lifts Conventional from $264,000 to $319,000 and VA from $394,000 to $455,000, because total debt is what holds those two down.
More qualifying income. Overtime, bonuses and a second job with a two-year history can count. So can a spouse or partner on the loan, and rent from a 2 to 4 unit home where you live in one unit: 75% of the other units' expected rent is added to your income.
The right program. The gap between Maria's highest and lowest result is $186,000 on the same paycheck. VA reaches the highest price for her, and for a buyer without VA eligibility, FHA 100% financing reaches the most with $0 down.
What a pre-approval adds
A calculator gives you the math. A pre-approval runs your actual credit report, income documents and assets through the automated underwriting system, which can approve ratios a little above or below what a calculator shows based on your credit and savings. It also catches the things a calculator can't see, like a debt that will be paid off in 10 months or a student loan servicer statement that changes the payment.
Start with the calculator on QualRate's home page, which runs all four programs at once and tells you which limit is holding your price down. If you already have a home in mind, the price check tells you whether a specific price works. When you want a broker on your actual numbers, call AAA Capital Funding at 888-601-8344. We shop multiple wholesale lenders and will walk through every program with you.