Household Budget Worksheet from The Arc of Spokane Home Ownership Opportunities Program.

The image you've uploaded is a Household Budget Worksheet from *The Arc of Spokane's Home Ownership Opportunities Program*. This worksheet is designed to help individuals or households assess their financial situation in preparation for homeownership. It asks for details about monthly income, monthly expenses, and calculates key financial ratios like the Housing Debt-to-Income (DTI) Ratio.

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🔍 Purpose of the Worksheet

This form helps determine:
- Whether a household can afford a mortgage.
- The proportion of income going toward housing costs.
- Financial stability for loan qualification.

It’s commonly used by housing counselors and lenders to evaluate affordability.

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✔ How to Use the Worksheet

#### 1. Fill in Monthly Income
List all sources of income before taxes:

| Income Source | Amount |
|---------------|--------|
| Wages/Salary (Gross Monthly Income) | $______ |
| Other Wages/Salary | $______ |
| Nontaxable Benefits (SSI, SSDI, etc.) | $______ |
| Section 8 Voucher (if applicable) | $______ |
| Child Support Received | $______ |
| Alimony | $______ |
| Annuity Payments | $______ |

👉 Add all these to get Total Monthly Income

> 💡 Example:
> - Salary: $3,000
> - Child Support: $500
> - SSI: $200
> → Total Monthly Income = $3,700

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#### 2. List Monthly Expenses
Fill in average monthly amounts for each category:

| Expense | Average Monthly Amount |
|--------|-------------------------|
| Food | $______ |
| Household Supplies | $______ |
| Utilities | $______ |
| Property Maintenance/Repair | $______ |
| Transportation | $______ |
| Telephone | $______ |
| Cable TV | $______ |
| Clothing | $______ |
| Recreation/Entertainment/Gym/Eating Out | $______ |
| Health Care (Rx, copays, premiums) | $______ |
| Insurance (Health, Life, Car) | $______ |
| Taxes (FICA, IRS debt) | $______ |
| Gifts (birthdays, holidays, etc.) | $______ |
| Charitable Donations | $______ |
| Pet Care Costs | $______ |
| Monthly Bills* (credit cards, loans, child support, alimony, car payments) | $______ |

👉 Add all to get Total Monthly Expenses

> 💡 Example:
> Total Expenses = $2,800

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#### 3. Calculate Residual Income
Use this formula:

```
Total Monthly Income = $3,700
(-) Total Monthly Expenses = ($2,800)
Total Residual Income = $900
```

Residual income shows how much money remains after essential expenses — important for qualifying for a mortgage.

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#### 4. Current Mortgage Expense & Housing DTI Ratio
If already owning a home, enter your current mortgage payment (including principal, interest, taxes, insurance, PMI if any).

Then calculate the Housing DTI Ratio:

```
Current Mortgage Expense / Total Monthly Income = ?
```

> Example:
> Mortgage = $1,200
> Income = $3,700
> → 1,200 ÷ 3,700 ≈ 32.4%

✔ Lenders typically prefer a housing DTI ratio below 31% for optimal approval chances.

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📌 Key Notes:

- "Monthly Bills*" includes existing debts like credit cards, student loans, car loans, etc.
- The Housing DTI Ratio focuses only on housing-related costs.
- Total DTI (not shown here) would include all debt obligations and is often capped at 43% by lenders.

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🧩 Final Output Example (Summary)

| Item | Amount |
|------|--------|
| Total Monthly Income | $3,700 |
| Total Monthly Expenses | $2,800 |
| Total Residual Income | $900 |
| Current Mortgage Expense | $1,200 |
| Housing DTI Ratio | 32.4% |

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✔ Recommendations Based on Results

- If Housing DTI > 31%, consider reducing debt or increasing income before applying for a mortgage.
- If residual income is low, you may need assistance programs like those offered by The Arc of Spokane.
- A high residual income indicates strong financial health and readiness for homeownership.

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🛠️ Next Steps

Once completed, submit this worksheet to a housing counselor or lender to:
- Evaluate mortgage eligibility.
- Apply for down payment assistance.
- Plan a realistic budget for homeownership.

Let me know if you'd like help filling it out with sample numbers or calculating specific ratios!