PITIA, also written ‘PITI’ or ‘PITIAO’, is an acronym representing all pieces of housing expenses. The 4 main pieces consist of principal, interest, property taxes, and homeowners insurance. The ‘A’ & ‘O’ stand for Association (aka HOA) and Other, respectively.
In addition to PITI, certain property and scenarios can include:
Special Assessment Taxes
CFDs (aka ‘Mello Roos’)
Secondary HOA Dues
Less/offset: Rental Income
When used in the lending context, PITIA usually refers to a property’s total financial weight on a borrower’s mthly cash flows.
Breaking Down PITIA
Principal (P): The part of your monthly mortgage that reduces your loan balance. It’s the portion of your mthly pmt As you pay down principal over time, you build equity in your home.
Interest (I): The part of your monthly mortgage paid to the bank as a fee. Interest is the cost of borrowing money. This is calculated as a percentage of your remaining loan balance and makes up the majority of your payment in the early years of your mortgage.
Taxes (T): Property taxes assessed by your county and local government. In California, these are typically 1% to 1.25% of your property's assessed value annually, plus any voter-approved bonds or assessments.
Insurance (I): Homeowners insurance (HOI) that protects your property against damage, theft, and liability. Lenders require this coverage to protect their investment in your home. See the dedicated insurance page for more details.
Association Dues (A): Monthly, quarterly, and/or annual fees charged by a Homeowners Association (HOA) or condo association for maintenance of common areas, amenities, and shared services.
Other (O): Catch-all for additional recurring costs specific to a property.
What Falls Under "Other"?
Mortgage Insurance: Required on conventional loans with less than 20% down (PMI) or on FHA loans (MIP). This protects the lender if you default on your loan.
Special Assessment Taxes: One-time or finite charges for neighborhood improvements like street repairs, sidewalk installation, or utility upgrades.
CFDs - Community Facilities Districts (aka Mello-Roos): Special taxes used to fund infrastructure and public services in newer developments. CFDs typically come in two forms:
CFD (Facilities): Finances one-time improvements like roads, sewers, and parks over time. Has a finite term (25-40 years).
CFD (Services): Funds ongoing services like police, fire protection, and park maintenance. Runs indefinitely.
Secondary HOA Dues: Some properties have multiple HOA layers—like a master association for an entire community plus a sub-association for your specific neighborhood or building.
Rental Income (Less/offset): This wouldn’t be included in the PITIA acronym, but it’s worth mentioning before reading the nexzFor investment properties, lenders may count a portion of expected rental income to offset your PITIA when calculating debt-to-income ratios.
How PITIA Is Used
When used in the lending context, PITIA usually refers to a property's total financial weight on a borrower's monthly cash flows. Lenders use your total PITIA payment to calculate your debt-to-income ratio (DTI), which helps determine how much you can afford to borrow. The higher your PITIA relative to your income, the more financial strain the property places on your budget.
While PITIA is obviously a key input on your household finances, it matters primarily because it's a key variable in virtually all loan products.- notably because of the DTI ratio.
Debt-to-Income Ratio (DTI): This is the most common way lenders measure your ability to repay a loan. DTI is expressed as debt divided by income. The debt portion of that formula includes all monthly payments that show up on your credit report (credit cards, car loans, student loans, etc.) plus the PITIA of the subject property you're financing and any investment properties you already own. Even if you're refinancing and your current payment will go away, lenders still count the new PITIA in your debt calculation.
DSCR Loans: Even with alternative loan products like DSCR loans—which qualify you based on what the property can rent for relative to what it costs to own—your PITIA is, by definition, the monthly cost side of that equation. The lender calculates the Debt Service Coverage Ratio by dividing the property's rental income by its PITIA. If the property's rent covers 125% of its PITIA, you qualify. No personal income required.
Investment Property Analysis: When you own multiple rental properties, lenders add each property's PITIA to your debt obligations, then offset them with a percentage of the rental income (typically 75%). This means PITIA directly impacts how many properties you can finance simultaneously.
The Bottom Line: PITIA isn't just your monthly housing expense—it's the standardized metric lenders use to measure financial risk across every loan type. Whether you're buying your first home with a conventional loan or financing your tenth rental with a DSCR product, PITIA remains the foundation of the underwriting calculation.