True or False: The total debt ratio for FHA loans should not exceed 43%.

The statement is accurate because the Federal Housing Administration (FHA) loans have specific guidelines regarding borrower qualifications, including the total debt ratio, often referred to as the debt-to-income (DTI) ratio. The standard guideline is that a borrower’s total DTI ratio should not exceed 43%, which means that the total of all monthly debt payments should not exceed 43% of the borrower’s gross monthly income. This threshold is crucial as it helps lenders assess the borrower's ability to manage monthly payments effectively while ensuring that the loan remains within sensible limits for risk management.

While there may be exceptions or flexibility in certain situations, particularly for borrowers with strong compensating factors such as a higher credit score, the 43% guideline serves as a benchmark used by most lenders to evaluate the affordability of the loan for the borrower. Thus, the assertion that the total debt ratio for FHA loans should not exceed 43% is indeed true and aligns with FHA lending practices.