The 30% gross-housing-cost guideline
HUD treats a household as cost-burdened when monthly housing costs, including utilities, exceed 30% of monthly income. This page applies an editable share to gross income, then subtracts utilities paid separately to estimate the maximum contract rent. Other monthly debts affect leftover cash but do not change HUD’s cost-burden threshold.
Gross housing-cost budget = monthly income × housing share
Maximum contract rent = housing-cost budget − separately paid utilities
40× monthly-rent screen = annual income ÷ 40
Leftover = monthly income − housing-cost budget − other monthly debts
Example
$60,000 of gross income is $5,000 a month. A 30% gross housing-cost budget is $1,500. If separately paid utilities are $150, the maximum contract rent under that budget is $1,350. The separate 40× landlord screen is $1,500 of monthly rent. With $400 of other monthly debts, $3,100 remains after the full $1,500 housing budget and those debts.
Planning limits
The HUD share uses gross income, not take-home pay, and is a cost-burden threshold rather than a guarantee of comfort or landlord approval. Add expected tenant-paid electricity, gas, water, and similar utilities. Parking, renter’s insurance, deposits, taxes, and savings goals may justify choosing a lower share.