If monthly income is $4,000, what is the maximum housing expense allowed under the FHA guideline?

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Multiple Choice

If monthly income is $4,000, what is the maximum housing expense allowed under the FHA guideline?

Explanation:
FHA uses a front-end housing expense ratio of 31% of gross monthly income. Housing costs include principal and interest, plus property taxes and homeowners insurance (PITI). With a monthly income of $4,000, the maximum allowed PITI is 0.31 × 4,000 = 1,240. So the maximum housing expense is $1,240. (Note: the back-end ratio for total debts is often 43%, but this question focuses on housing expense specifically.)

FHA uses a front-end housing expense ratio of 31% of gross monthly income. Housing costs include principal and interest, plus property taxes and homeowners insurance (PITI). With a monthly income of $4,000, the maximum allowed PITI is 0.31 × 4,000 = 1,240. So the maximum housing expense is $1,240. (Note: the back-end ratio for total debts is often 43%, but this question focuses on housing expense specifically.)

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