Housing Counselor Certification (HUD) 2025 – 400 Free Practice Questions to Pass the Exam

The back-end ratio, also known as the debt-to-income ratio (DTI), measures the percentage of a borrower's gross monthly income that goes toward all monthly debt payments. To calculate the back-end ratio, you first need to determine the total monthly debt payments and then divide that by the gross monthly income.

In this case, the client has a monthly housing expense of $1,250 and additional consumer debt payments totaling $88. Therefore, the total monthly debt payments are calculated as follows:

Total monthly debt payments = Monthly housing expense + Monthly consumer debt payments

Total monthly debt payments = $1,250 + $88 = $1,338

Next, you take the total monthly debt payments and divide it by the gross household income:

Back-end ratio = (Total monthly debt payments / Gross monthly income) * 100

Back-end ratio = ($1,338 / $4,460) * 100

This results in:

Back-end ratio = 0.3004 * 100 ≈ 30%

When rounded to the nearest whole percent, this gives us a back-end ratio of 30%. Thus, the correct answer is 30%. This metric is important because it helps lenders assess a borrower's ability to manage monthly