How much house you can afford in Franklin, TN depends mostly on your debt-to-income ratio, or DTI. DTI is all your monthly debt payments, including the new house payment, divided by your monthly income before taxes. Different loans allow different DTIs. For example, Fannie Mae allows up to 50% when a loan is approved through its automated system, and 36% (up to 45% in some cases) when a person underwrites it by hand. Your DTI tells you the biggest monthly payment you can get approved for. Then rates, property taxes, insurance, and HOA dues turn that payment into a price.
Franklin is one of the most popular places to buy in Middle Tennessee. Before you shop, it helps to know the number lenders care about most: your debt-to-income ratio.
The CFPB explains it this way: add up all your monthly debt payments. Then divide by your gross monthly income. Gross income is what you earn before taxes come out.
The CFPB's example: $1,500 mortgage + $100 car loan + $400 other debts = $2,000 a month. If you earn $6,000 a month, your DTI is 33%.
Things like groceries, phone bills, and utilities usually do not count.
| Loan type | DTI limit |
|---|---|
| Conventional (Fannie Mae), automated approval | Up to 50% |
| Conventional (Fannie Mae), approved by hand | 36%, or up to 45% with strong credit and savings |
| FHA, approved by hand | 31% for housing and 43% for all debts (higher with certain strengths) |
Most loans today go through an automated system first. Lenders can also set tighter rules of their own.
Say you earn $9,000 a month before taxes. You pay $800 a month for a car loan, a student loan, and a credit card. Here is the biggest house payment each DTI would allow:
| DTI limit | All debts allowed | Minus other debts | Biggest house payment |
|---|---|---|---|
| 36% | $3,240 | $800 | $2,440 |
| 45% | $4,050 | $800 | $3,250 |
| 50% | $4,500 | $800 | $3,700 |
| FHA by hand (31% / 43%) | $3,870 | $800 | $2,790 (the 31% housing cap is lower) |
The "house payment" includes taxes, insurance, and HOA dues, not just the loan. This example is just math. It is not a loan offer.
Once you know your top payment, a few things decide the price you can buy:
The most a lender will approve is not always what feels good each month. Think about savings, childcare, and other goals too. A smart plan leaves room to breathe.
Lower is better. Fannie Mae allows up to 50% for loans approved through its automated system, and 36% (up to 45% in some cases) for loans approved by hand. Each lender can also set its own limit.
Add up all your monthly debt payments, including the new house payment. Divide by your monthly income before taxes. For example, $2,000 in debts divided by $6,000 in income is 33%.
Usually no. DTI counts debts like your house payment, car loans, student loans, credit card minimums, and child support. It does not usually count groceries, phone bills, or utilities.
$100,000 a year is about $8,333 a month before taxes. At a 36% DTI, all your debts could be up to about $3,000 a month. Subtract your other debts to get your top house payment. Then your rate, taxes, insurance, and HOA dues turn that payment into a price.
Sometimes. Automated approval for some loans allows up to 50%. Strong credit, savings, or a bigger down payment can help. Paying off a small debt before you apply can also lower your DTI.
No. Lenders use gross income, which is what you earn before taxes and other deductions.
Want to know your real number for a home in Franklin, Brentwood, or Nashville? I can run your DTI and turn it into a price range using today's rates and local taxes. Call me at (615) 495-6594, email travis@heathrowmtg.com, or start an application.
Figures checked October 11, 2026. Rules can change, and lenders can set tighter limits. Examples are for illustration only and are not a loan offer.
