What are typical front-end and back-end DTI guidelines for conventional loans?

• A. 28% front-end and 36% back-end
• B. 36% front-end and 28% back-end
• C. 31% front-end and 43% back-end
• D. 20% front-end and 50% back-end

Answer: (A)

Front-end and back-end DTI show how big a borrower’s monthly debt load is relative to income. The front-end ratio looks at housing costs—principal, interest, taxes, and insurance (PITI)—as a portion of gross monthly income. The back-end ratio considers all monthly debt payments (PITI plus other debts like car loans, student loans, credit cards) as a portion of gross monthly income.

For conventional loans, the typical guideline is a front-end cap around 28% and a back-end cap around 36%. In other words, housing costs should usually stay at or below about 28% of gross income, and total debt payments should stay at or below about 36% of gross income. This helps lenders assess affordability and default risk.

Keep in mind some lenders may allow higher DTIs with compensating factors (such as a strong credit score or substantial reserves), but 28/36 is the standard reference for conventional loans.