What are the maximum Housing Ratio and Debt-to-Income Ratio for FHA loans?

The choice indicating maximum values of 31% for the Housing Ratio and 43% for the Debt-to-Income (DTI) Ratio for FHA loans is accurate because these ratios are key guidelines set by the Federal Housing Administration for borrower qualification.

The Housing Ratio, often referred to as the Front-End Ratio, encompasses the percentage of a borrower's monthly income that goes towards housing costs, which typically includes the mortgage payment, property taxes, and homeowners insurance. The FHA's guideline of a 31% limit ensures that borrowers are not overextending themselves on housing expenses relative to their income.

On the other hand, the Debt-to-Income Ratio is a broader measure that encompasses all debt obligations, including housing costs plus other debts such as car loans, student loans, and credit card payments. The FHA allows a maximum DTI Ratio of 43%, which helps ensure that borrowers can comfortably manage their overall financial obligations without excessive risk.

These guidelines are structured to promote sustainable homeownership and minimize the risk of default, thereby protecting both borrowers and lenders. Other options provided do not align with current FHA lending standards.