Two years adjusted gross income is avaraged to derive monthly income. However, if the later year is lower, then underwriters will take the lower year adjusted gross income and just use that figure and divide by 12 months. Maximum debt to income ratios on FHA LOANS is 46.9% front end and 56,9% back end to get an approve eligible per AUS FINDINGS if credit scores are over 620. Under 620 credit scores caps DTI at 43% for automated underwriting system approval. Conventional Loans require 45% DTI under 700 credit scores and up to 50% DTI on credit scores over 700. 20% down payment on purchase conventional loans can have DTI capped at 50%. VA LOANS do not have DTI requirements. I have gotten AUS FINDINGS APPROVAL up to 60% on VA LOANS.