diff --git a/doc/source/devref/filter_scheduler.rst b/doc/source/devref/filter_scheduler.rst
index 9f51462d3bc..92ee8981961 100644
--- a/doc/source/devref/filter_scheduler.rst
+++ b/doc/source/devref/filter_scheduler.rst
@@ -58,7 +58,9 @@ code. For example class |RamFilter| has the next realization:
             instance_type = filter_properties.get('instance_type')
             requested_ram = instance_type['memory_mb']
             free_ram_mb = host_state.free_ram_mb
-            return free_ram_mb * FLAGS.ram_allocation_ratio >= requested_ram
+            total_usable_ram_mb = host_state.total_usable_ram_mb
+            used_ram_mb = total_usable_ram_mb - free_ram_mb
+            return total_usable_ram_mb * FLAGS.ram_allocation_ratio  - used_ram_mb >= requested_ram
 
 Here `ram_allocation_ratio` means the virtual RAM to physical RAM allocation
 ratio (it is 1.5 by default). Really, nice and simple.
diff --git a/nova/scheduler/filters/ram_filter.py b/nova/scheduler/filters/ram_filter.py
index 65889d426b1..4bc84c243d2 100644
--- a/nova/scheduler/filters/ram_filter.py
+++ b/nova/scheduler/filters/ram_filter.py
@@ -37,4 +37,7 @@ def host_passes(self, host_state, filter_properties):
         instance_type = filter_properties.get('instance_type')
         requested_ram = instance_type['memory_mb']
         free_ram_mb = host_state.free_ram_mb
-        return free_ram_mb * FLAGS.ram_allocation_ratio >= requested_ram
+        total_usable_ram_mb = host_state.total_usable_ram_mb
+        used_ram_mb = total_usable_ram_mb - free_ram_mb
+        return (total_usable_ram_mb * FLAGS.ram_allocation_ratio -
+                used_ram_mb >= requested_ram)
diff --git a/nova/scheduler/host_manager.py b/nova/scheduler/host_manager.py
index f5ba724d5db..289ac274415 100644
--- a/nova/scheduler/host_manager.py
+++ b/nova/scheduler/host_manager.py
@@ -124,7 +124,9 @@ def update_from_compute_node(self, compute):
             all_disk_mb -= FLAGS.reserved_host_disk_mb
         if FLAGS.reserved_host_memory_mb > 0:
             all_ram_mb -= FLAGS.reserved_host_memory_mb
+        #NOTE(jogo) free_ram_mb can be negative
         self.free_ram_mb = all_ram_mb
+        self.total_usable_ram_mb = all_ram_mb
         self.free_disk_mb = all_disk_mb
         self.vcpus_total = vcpus_total
 
diff --git a/nova/tests/scheduler/test_host_filters.py b/nova/tests/scheduler/test_host_filters.py
index f56a14565ab..19b42fd2830 100644
--- a/nova/tests/scheduler/test_host_filters.py
+++ b/nova/tests/scheduler/test_host_filters.py
@@ -182,10 +182,22 @@ def test_ram_filter_fails_on_memory(self):
         capabilities = {'enabled': True}
         service = {'disabled': False}
         host = fakes.FakeHostState('host1', 'compute',
-                {'free_ram_mb': 1023, 'capabilities': capabilities,
-                 'service': service})
+                {'free_ram_mb': 1023, 'total_usable_ram_mb': 1024,
+                 'capabilities': capabilities, 'service': service})
         self.assertFalse(filt_cls.host_passes(host, filter_properties))
 
+    def test_ram_filter_oversubscribe(self):
+        self._stub_service_is_up(True)
+        filt_cls = self.class_map['RamFilter']()
+        self.flags(ram_allocation_ratio=2.0)
+        filter_properties = {'instance_type': {'memory_mb': 1024}}
+        capabilities = {'enabled': True}
+        service = {'disabled': False}
+        host = fakes.FakeHostState('host1', 'compute',
+                {'free_ram_mb': -1024, 'total_usable_ram_mb': 2048,
+                 'capabilities': capabilities, 'service': service})
+        self.assertTrue(filt_cls.host_passes(host, filter_properties))
+
     def test_compute_filter_fails_on_service_disabled(self):
         self._stub_service_is_up(True)
         filt_cls = self.class_map['ComputeFilter']()