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How much income do you need to buy a home?

The gross income a lender looks for, from the full monthly payment in your county and your other debts, at the conventional and FHA ratios.

In short

To keep the monthly payment on a home at the US median value ($332,700, 20% down, 7.4% over 30 years, property tax and insurance included: $2,233) within 28% of gross income, a household needs about $95,687 a year before tax, with no other debts. On each state's median home, that income runs from $47,861 in West Virginia to $224,002 in Hawaii. FHA's manual underwriting limits (31% and 43%) lower the figure; monthly debts raise it.

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Income needed for this home

The housing payment is the same as in the mortgage calculator; add your other monthly debts. The result is recalculated as you type.

Principal and interest$1,843
Property tax$261
Homeowners insurance$129
HOA fee$135
Mortgage insurance$0
Monthly housing payment$2,368
Other monthly debts$500
Income needed, conventional (28/36)$101,473
a month · limited by the$8,456 · housing ratio
Income needed, FHA (31/43)$91,653
a month · limited by the$7,638 · housing ratio

United States: property tax 0.94% of value a year, insurance $1,551 a year.

Income needed = the higher of (housing payment ÷ housing ratio) and ((housing payment + other debts) ÷ total ratio), in gross income before tax. FHA: 31% and 43%, the limits for a manually underwritten loan without compensating factors (HUD Handbook 4000.1, II.A.5.d.viii, Approvable Ratio Requirements). Conventional: 36% is Fannie Mae's maximum total ratio for a manually underwritten loan (Selling Guide B3-6-02); the 28% housing ratio is a common benchmark that Fannie Mae does not set. Loans approved by automated underwriting can go higher. Default: US median home value, 20% down, 7.4% (Freddie Mac, week of October 15, 2026), $500 of other debts. Not included: mortgage insurance unless you enter it, the lender's own overlays, cash reserves and credit score requirements.

Income needed for each state's median home

StateMedian home valueMonthly paymentIncome needed, 28%Income needed, FHA 31%
Alabama$233,300$1,521$65,181$58,873
Alaska$376,500$2,541$108,884$98,347
Arizona$426,000$2,628$112,616$101,717
Arkansas$215,600$1,435$61,480$55,530
California$759,500$4,785$205,058$185,214
Colorado$574,600$3,624$155,317$140,287
Connecticut$396,900$2,956$126,690$114,430
Delaware$371,600$2,307$98,867$89,299
Florida$396,900$2,717$116,460$105,190
Georgia$343,300$2,258$96,775$87,410
Hawaii$875,900$5,227$224,002$202,325
Idaho$446,400$2,758$118,192$106,754
Illinois$280,700$2,155$92,367$83,428
Indiana$243,500$1,621$69,471$62,748
Iowa$227,300$1,656$70,963$64,096
Kansas$238,700$1,770$75,837$68,498
Kentucky$226,000$1,520$65,153$58,848
Louisiana$223,200$1,542$66,076$59,682
Maine$341,900$2,280$97,721$88,264
Maryland$436,300$2,896$124,115$112,104
Massachusetts$607,400$4,060$174,008$157,168
Michigan$254,200$1,770$75,874$68,532
Minnesota$344,600$2,356$100,993$91,219
Mississippi$186,500$1,305$55,929$50,517
Missouri$254,400$1,755$75,218$67,939
Montana$425,400$2,763$118,434$106,973
Nebraska$263,100$1,987$85,150$76,910
Nevada$455,500$2,791$119,622$108,046
New Hampshire$458,800$3,290$140,989$127,345
New Jersey$496,000$3,753$160,828$145,264
New Mexico$279,900$1,835$78,624$71,016
New York$449,800$3,174$136,026$122,863
North Carolina$333,000$2,138$91,610$82,745
North Dakota$266,100$1,854$79,470$71,780
Ohio$239,800$1,693$72,570$65,547
Oklahoma$222,100$1,589$68,087$61,498
Oregon$497,500$3,188$136,610$123,390
Pennsylvania$277,600$1,923$82,412$74,437
Rhode Island$455,700$3,150$135,017$121,950
South Carolina$299,500$1,900$81,446$73,564
South Dakota$289,600$2,009$86,118$77,784
Tennessee$332,600$2,121$90,884$82,088
Texas$313,200$2,311$99,049$89,463
Utah$545,200$3,343$143,267$129,402
Vermont$352,800$2,522$108,081$97,621
Virginia$403,500$2,587$110,877$100,147
Washington$602,200$3,851$165,033$149,062
West Virginia$170,800$1,117$47,861$43,229
Wisconsin$294,700$2,081$89,186$80,555
Wyoming$339,500$2,181$93,458$84,414

Gross annual income with no other debts, so the housing ratio decides. State median value of owner-occupied homes (Census ACS 2024), 20% down in both columns, 30-year fixed loan at 7.4% (Freddie Mac PMMS, week of October 15, 2026), property tax at the state's effective rate (ACS 2020-2024) and the state median insurance premium (FIO, 2022); no HOA fee. The FHA column excludes FHA mortgage insurance premiums, which Payotte does not estimate.

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Questions

What is the 28/36 rule?

A benchmark for a conventional loan: housing costs (principal, interest, property tax, insurance, HOA and mortgage insurance) at no more than 28% of gross monthly income, and all monthly debt payments including housing at no more than 36%. The 36% is Fannie Mae’s maximum total debt-to-income ratio for manually underwritten loans (Selling Guide B3-6-02), which it allows up to 45% with the required credit score and reserves, and up to 50% through its Desktop Underwriter system. Fannie Mae sets no separate housing ratio: the 28% is a common benchmark, not a Fannie Mae rule.

What debt-to-income ratio does FHA allow?

For a manually underwritten FHA loan, 31% for the total mortgage payment and 43% for total fixed payments, with no compensating factor needed (HUD Handbook 4000.1, II.A.5.d.viii). Borrowers with a credit score of 580 or more can go to 37/47 with one compensating factor and 40/50 with two; loans approved through FHA’s automated scorecard follow its own decision.

What counts as other debts?

The monthly payments on your other debts and obligations, such as car loans, student loans and the minimum payment on credit cards. The lender takes them from your application and credit report; enter their monthly total.

General information drawn from the official sources cited and dated on this page. It is not legal, tax or financial advice: for your own situation, ask a licensed professional.

Sources