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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, 7.24% over 30 years, property tax and insurance included: $2,204) within 28% of gross income, a household needs about $94,446 a year before tax, with no other debts. On each state's median home, that income runs from $48,613 in West Virginia to $226,963 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$1,814
Property tax$261
Homeowners insurance$129
HOA fee$135
Mortgage insurance$0
Monthly housing payment$2,339
Other monthly debts$500
Income needed, conventional (28/36)$100,232
a month · limited by the$8,353 · housing ratio
Income needed, FHA (31/43)$90,532
a month · limited by the$7,544 · 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, 7.24% (Freddie Mac, week of October 29, 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$246,500$1,577$67,574$61,034
Alaska$385,100$2,563$109,830$99,201
Arizona$427,600$2,600$111,428$100,644
Arkansas$228,400$1,491$63,918$57,732
California$770,700$4,786$205,122$185,271
Colorado$567,600$3,533$151,418$136,765
Connecticut$423,900$3,109$133,263$120,367
Delaware$392,600$2,398$102,762$92,817
Florida$396,700$2,682$114,927$103,805
Georgia$346,500$2,248$96,330$87,008
Hawaii$901,500$5,296$226,963$204,999
Idaho$457,800$2,786$119,390$107,836
Illinois$294,400$2,228$95,504$86,262
Indiana$255,200$1,671$71,606$64,676
Iowa$237,000$1,700$72,863$65,812
Kansas$252,600$1,839$78,834$71,205
Kentucky$242,000$1,598$68,477$61,850
Louisiana$231,800$1,573$67,422$60,897
Maine$370,300$2,429$104,116$94,040
Maryland$445,800$2,918$125,036$112,936
Massachusetts$626,900$4,131$177,043$159,910
Michigan$269,500$1,848$79,184$71,521
Minnesota$353,800$2,384$102,192$92,302
Mississippi$192,700$1,326$56,841$51,341
Missouri$271,400$1,838$78,757$71,135
Montana$427,500$2,739$117,392$106,031
Nebraska$279,200$2,072$88,787$80,195
Nevada$459,400$2,774$118,900$107,393
New Hampshire$487,100$3,443$147,567$133,286
New Jersey$530,800$3,960$169,732$153,306
New Mexico$293,400$1,892$81,072$73,226
New York$470,900$3,277$140,447$126,855
North Carolina$342,800$2,167$92,888$83,899
North Dakota$281,700$1,929$82,674$74,673
Ohio$254,100$1,766$75,685$68,361
Oklahoma$234,000$1,642$70,379$63,568
Oregon$507,900$3,208$137,485$124,180
Pennsylvania$292,400$1,996$85,522$77,246
Rhode Island$478,700$3,259$139,684$126,167
South Carolina$306,200$1,914$82,009$74,073
South Dakota$299,100$2,044$87,617$79,138
Tennessee$341,200$2,142$91,806$82,921
Texas$318,100$2,317$99,286$89,677
Utah$543,400$3,285$140,779$127,155
Vermont$359,800$2,539$108,798$98,269
Virginia$422,600$2,668$114,332$103,268
Washington$605,600$3,819$163,679$147,839
West Virginia$176,300$1,134$48,613$43,908
Wisconsin$316,500$2,200$94,285$85,161
Wyoming$357,300$2,257$96,713$87,353

Gross annual income with no other debts, so the housing ratio decides. State median value of owner-occupied homes (Census ACS 2025), 20% down in both columns, 30-year fixed loan at 7.24% (Freddie Mac PMMS, week of October 29, 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