According to the Federal Housing Administration (FHA), what is the maximum percentage of a person's monthly income that should be spent on housing expenses?
A) 35%
B) 21%
C) 31%
D) 25%
Answer (2)
The Federal Housing Administration (FHA) provides guidelines on the maximum percentage of a person's monthly income that should be spent on housing expenses.
The question asks for this maximum percentage.
According to the FHA, this percentage is generally around 31%.
Comparing this guideline to the provided options, the correct answer is C) 31%.
Therefore, the maximum percentage is 31% .
Explanation
Understanding the Problem The question asks about the maximum percentage of a person's monthly income that should be spent on housing expenses according to the Federal Housing Administration (FHA). The possible answers are A) 35%, B) 21%, C) 31%, and D) 25%.
Finding the FHA Guideline The problem requires recalling or looking up the FHA's guideline for the maximum percentage of monthly income that should be spent on housing expenses.
Identifying the Correct Percentage According to the Federal Housing Administration (FHA), the maximum percentage of a person's monthly income that should be spent on housing expenses is generally around 31%.
Selecting the Correct Option Comparing the FHA guideline with the given options (35%, 21%, 31%, and 25%), the option that matches the FHA guideline is 31%.
Final Answer Therefore, the answer is C) 31%.
Examples
Understanding the maximum percentage of income that should be spent on housing expenses is crucial for financial planning. For example, if a person earns $3,000 per month, according to the FHA, they should ideally spend no more than 31% of their income on housing. This means their housing expenses should not exceed $3,000 * 0.31 = $930. This guideline helps individuals ensure they have enough money left for other essential expenses and savings, promoting financial stability and preventing overspending on housing.
According to the Federal Housing Administration (FHA), the maximum percentage of a person's monthly income that should be spent on housing expenses is 31%, making C) 31% the correct option. This guideline helps individuals manage their finances effectively. For a monthly income of $3,000, this means housing costs should ideally not exceed $930.
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