An FHA loan might be a better option in certain situations. For instance, if you have a lower than average credit score or if you’re struggling with a debt to income ratio above 50%, FHA loans offer lower interest rates, making it easier for you to manage monthly payments.

Debt to income ratio is calculated by adding all the monthly payments reflected on your credit report – car, student loans, personal loans, credit card payments, etc. This sum, combined with your new mortgage payment, including taxes, homeowners’ insurance, homeowner association dues, and private mortgage insurance, is divided by your household gross monthly income. The quotient is your debt to income ratio, which helps determine your purchasing power when buying a house.

Additionally, FHA loans can provide an array of benefits, such as offering lower credit score requirements (minimum credit score of less than 620) which makes it more accessible for those with poor credit ratings.

In conclusion, FHA loans’ lower rates and more flexible credit requirements might make them the right choice for individuals with a higher debt to income ratio or poor credit scores. However, it’s vital to conduct a thorough analysis of your financial goals, credit score, and debt to income ratio before choosing the right option for you.