How much home can you afford?

Most people guess too low — because they're using the wrong rule. Affordability isn't one number tied to your salary; it's the result of your income, debts, credit, down payment, and the loan and assistance programs you qualify for. Change the down payment or add assistance, and the answer changes dramatically.

Here's how affordability really works — and how buyers get to "yes" with far less cash than they expect.

What "affordable" actually means

Lenders look at your monthly payment relative to your income, not just the sticker price. The payment — often called PITI — includes Principal, Interest, property Taxes, and Insurance (plus HOA and mortgage insurance where they apply).

A common starting guideline is the 28/36 rule: aim to keep housing costs around 28% of gross monthly income and total debt payments under about 36%. It's a rule of thumb, not a hard limit — many loan programs approve higher debt-to-income ratios with strong compensating factors.

The five things that set your number

1. Income — gross monthly income, plus stable additional income.
2. Debts (DTI) — car loans, student loans, credit cards. Lowering these raises your buying power fast.
3. Credit score — a better score can mean a better rate, which means more home for the same payment.
4. Down payment — affects loan size and whether you pay mortgage insurance.
5. Loan type & assistance — the program you use sets your minimum down and your rate, and assistance can cover much of the cash.

The down-payment myth

You almost certainly don't need 20% down. Real options include:

• Conventional — as little as 3% down for many qualified and first-time buyers.
• FHA — 3.5% down with a 580+ credit score.
• VA / USDA — 0% down for eligible buyers (military/veterans; certain rural areas).
• Ownify (fractional / shared equity) — buy with as little as 2% down, with no traditional mortgage, in select markets (CO, NC, TN, CA). See fractional & shared equity ownership.

Stack down-payment assistance on top of a low-down loan and your out-of-pocket cash can shrink to a fraction of what you assumed. See down-payment-assistance programs →

How assistance changes the math

Two buyers with identical incomes can afford very different homes depending on the cash they bring and the programs they use. A grant or forgivable second can cover much of the down payment; a Mortgage Credit Certificate can improve your monthly affordability through a tax credit. The point: your affordability isn't fixed — it's a function of the path you take.

"What salary do I need for a $400,000 house?"

There's no single answer, because it depends on your down payment, debts, rate, taxes, and insurance. A buyer with low debts, a solid credit score, and down-payment assistance can reach a price that looks out of range to someone using the 20%-down assumption. That's exactly why a personalized analysis beats a generic calculator.

Don't guess — get your real number

A generic calculator uses national averages. Owen uses your situation: it pulls live loan quotes, checks every assistance program you may qualify for, models low-down and alternative paths, and returns a personalized affordability range — as a written plan you can act on.

Frequently asked questions

What percentage of income should go to a mortgage?

Around 28% of gross income is a common target, but programs vary — your real limit depends on your full financial picture.

How much down payment do I really need?

As little as 0–3.5% with common loan programs, 2% with Ownify's fractional path, and assistance can cover much of that.

Does a higher credit score really change affordability?

Yes — a better rate lowers your monthly payment, which raises the price you can afford at the same budget.

Will paying off debt help me afford more?

Often significantly — lowering monthly debt directly improves your debt-to-income ratio and buying power.

Equal Housing Opportunity. This guide is educational and not a commitment to lend.