Lower and The TW Team
Home Affordability Calculator
Affordability

How much house, and what is stopping you

Most affordability calculators run one rule from the 1970s and hand back one number. A real maximum is the lowest of four separate ceilings, your ratio, your cash, the county limit, and on a VA loan the residual income test, and which one binds is the whole answer, because it is the only thing that tells you what to go and fix. This solves all four, for conventional, FHA and VA at once, and names the one holding you back.

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An estimate from your figures, not a pre-approval, not advice, and not an offer of credit.

Your Figures

Before tax, all borrowers together. Underwriting uses stable, documented income, not a good month.

Cars, cards, personal loans, child support. Not utilities, groceries, insurance or anything else that never appears on a credit report. Leave student loans out, they go below, because the three programmes count them differently.

Student loans

One balance, three answers. A verified $0 income-driven payment qualifies at $0 on conventional; FHA uses 0.5% of the balance and does not accept a $0; VA drops it entirely if repayment starts more than twelve months after closing.

Everything you can put in: down payment, closing costs and prepaids all come out of this.

An example rate, not our pricing, replace it with one you have been quoted. Nothing on this page adjusts it. The score sets the conventional mortgage insurance factor; below 620 the card does not price at all.

Show the detail for

All three are solved either way, this picks which one the panels below open out.

Costs of ownership

Taxes and insurance are a percentage of the price per year and both count against the ratio, so both move the answer. Closing costs are a percentage of the loan; three months of taxes and insurance are added as prepaids.

Ratios, down payment and the comfort rule

50% is the maximum Desktop Underwriter will approve on a conventional loan and it is a hard stop. FHA has no fixed ceiling once the TOTAL Scorecard returns an approval, 43% is the guideline, and the scorecard routinely goes past it, so this one is yours to set. VA has no ceiling at all; residual income governs instead.

3% is available to a qualifying first-time buyer; 5% is the general minimum. The comfort rule is the housing payment as a share of gross income, it is not a guideline, it is the one this page states so you can argue with it.

VA: entitlement and residual income

Residual income is what is left each month after the payment, the debts, income tax and an allowance for maintenance and utilities of 14¢ a square foot. The required figure comes from VA's own tables and depends on household size, region and loan amount.

What Is Actually Stopping You

The Same Person, Three Different Answers

Conventional, FHA and VA are not three prices for one loan. They are three sets of rules applied to the same income, and they disagree about your debts, your down payment, your mortgage insurance and your loan limit.

What You Would Be Approved For, And What You Could Live On

Two different questions. Only one of them is asked at an underwriting desk.

The gap

A lender would approve –

the figure above, on this programme

The comfort rule gives –

housing at or below your stated share of income

The distance between them –

of purchase price

What is left each month

At the lender's maximum after the payment and your debts, before tax –
At the comfort number same basis –
Payment at the comfort number everything the ratio counts –

Neither figure is take-home. Income tax, retirement contributions, health insurance and everything you actually spend money on come out of what is shown here. That is the honest reason the two numbers are worth seeing together.

What Each Fix Is Worth

Not general advice, the model run again with one input changed, on your figures, against the constraint that is actually binding you.

Reference

Where every one of these numbers comes from

Each rule below is published by the agency that writes it, and each one is doing work in the calculator above. Check any of them against your own paperwork.

Why there is no single affordability rule

The figure most calculators use, 28% of income on housing, 36% on everything, is a rule of thumb from an era before automated underwriting. No agency requires it and no lender underwrites to it.

What actually decides your maximum is the lowest of several unrelated ceilings. Your ratio caps the payment. Your cash caps the down payment and the costs. The county caps the loan. On a VA loan a residual income test caps everything. Each is computed separately, and only the smallest one matters.

This is why "how much can I afford" has no single answer, and why the useful output is not the number but the name of the constraint that produced it. Two buyers at the same price are often one debt payment and one savings account apart.

Conventional: a hard ceiling at 50%

Fannie Mae's Desktop Underwriter will not approve a debt-to-income ratio above 50%. That is a genuine stop, not a guideline, above it the loan is ineligible, whatever else is true about the file.

A manually underwritten conventional loan is far tighter: 36% of stable monthly income as the base maximum, stretching to 45% only where the credit score and reserves in the Eligibility Matrix are met. Almost nothing is manually underwritten, which is why the 50% figure is the one that matters in practice.

Source: Fannie Mae Selling Guide B3-6-02, Debt-to-Income Ratios.

FHA: a guideline, and then the scorecard

FHA's published qualifying ratios are 31% and 43%, housing payment to effective income, and total fixed payments to effective income. Exceed them on a manually underwritten file and the lender must document compensating factors.

But almost every FHA loan runs through the TOTAL Mortgage Scorecard, and HUD is explicit that the compensating-factor requirement for exceeding the ratios does not apply to a loan the scorecard rates acceptable. So on an FHA loan with an approval there is no fixed ceiling, which is exactly why the ratio is an input you can set on this page rather than a number we assert.

What FHA gives away in ratio it takes back in mortgage insurance: an upfront premium of 1.75% of the base loan, financed, plus an annual premium that runs for the life of the loan on anything above 90% loan-to-value.

Source: HUD, qualifying ratios and the TOTAL Scorecard exception; HUD Handbook 4000.1 for the premium schedule.

VA: no ratio ceiling at all

VA does not cap debt-to-income. 41% is a guideline, and a file above it is not declined, it needs residual income exceeding the requirement by 20%, or a written justification from the underwriter.

The real test is residual income: a fixed dollar amount that must be left over every month after the housing payment, every other debt, federal and state income tax, and an allowance for maintenance and utilities. The required figure is set by household size, by one of four regions, and by whether the loan is above or below $80,000.

VA sets the requirement as a dollar figure that varies with household size, region and loan amount rather than as a percentage of income. That is VA's rule rather than a lender preference, and it is why the household-size field changes the VA column and no other.

Sources: the 41% guideline and the 20% residual cushion above it are at 38 CFR 36.4340(c); the ratio guideline is at (d) and the residual income tables at (e). Maintenance and utilities: VA Pamphlet 26-7, Chapter 4.

The residual income tables

Four regions. The Northeast is CT, ME, MA, NH, NJ, NY, PA, RI and VT. The Midwest is IL, IN, IA, KS, MI, MN, MO, NE, ND, OH, SD and WI. The West is AK, AZ, CA, CO, HI, ID, MT, NV, NM, OR, UT, WA and WY. Everything else is the South.

Residual income required, loan of $80,000 or more
HouseholdNortheastMidwestSouthWest
1$450$441$441$491
2$755$738$738$823
3$909$889$889$990
4$1,025$1,003$1,003$1,117
5$1,062$1,039$1,039$1,158
Each over 5add $80 a head, to a household of seven

Below $80,000 the figures are lower and the step is $75. The maintenance and utilities allowance is 14¢ per square foot of the property, which is why the size of the house you are buying changes the amount of residual income you need.

Student loans: one balance, three answers

One of the largest unforced differences between the programmes, and it does not appear on a calculator that takes your debts as a single number.

Conventional. The payment on the credit report. Where that payment is $0 under an income-driven plan and the $0 can be verified, $0 is what qualifies. Where the loan is deferred or in forbearance, 1% of the outstanding balance, or a documented fully amortising payment.

FHA. The reported or documented payment, and where that payment is zero, 0.5% of the outstanding balance. FHA does not accept a $0.

VA. Excluded entirely if repayment is deferred to a date more than twelve months after closing. Otherwise the greater of the payment on the credit report and 5% of the outstanding balance divided by twelve. A lower reported payment may be used only with a servicer statement dated within sixty days of closing.

On a $60,000 balance sitting at $0, that is $0, $300 and nothing, three different borrowers, one person.

Sources: Fannie Mae Selling Guide B3-6-05; HUD Mortgagee Letter 2021-13; VA Lender's Handbook M26-7, Chapter 4, on deferred obligations and the 5% threshold.

Which debts count, and which do not

Counted: anything on your credit report with a monthly payment, cars, cards, personal and student loans, plus court-ordered alimony and child support.

Not counted: utilities, groceries, petrol, childcare, health insurance, car insurance, phone bills, retirement contributions, or anything else you actually spend money on. This is the reason a lender's maximum and a household budget are different numbers, and the reason this page shows both.

Two rules people get wrong in opposite directions. An instalment debt with ten or fewer payments left may be left out, so a car loan nearly paid off may not be counting against you at all. The condition matters: it must still be counted if the payment significantly affects the borrower's ability to meet their obligations, which a $900 car payment with eight left certainly does. But a lease counts whatever the remaining term, because a lease that ends is replaced by another lease or a purchase. A car three payments from being yours helps you; a car three payments from the end of its lease does not.

A revolving account with no payment shown is counted at 5% of the balance.

Source: Fannie Mae Selling Guide B3-6-05, Monthly Debt Obligations.

Cash to close is a separate ceiling

The down payment is only part of it. Closing costs, origination, title, escrow, appraisal, recording, transfer taxes, and prepaid items run alongside it, and they are paid at the same table on the same day.

This page estimates costs at a percentage of the loan and adds three months of taxes and insurance as prepaids. Both are placeholders for real figures that arrive on a Loan Estimate, and both scale with the price, which is why raising the price does not simply raise the down payment.

It is very common for cash rather than income to be what binds a first purchase. When it is, the whole conversation changes: seller credits, lender credits, gift funds and down payment assistance all move this ceiling and none of them touch the ratio.

The county limit, and why it is measured on the base loan

2026 conforming limits run from a baseline of $832,750 for a one-unit property to a ceiling of $1,249,125 in high-cost counties. FHA sets its own limits separately, from a floor of $541,287, and they are often a different number in the same county.

Limits are measured against the base loan amount, the mortgage before any financed upfront premium. A financed FHA premium or VA funding fee sits on top and is excluded, so a note amount above the limit is not by itself a problem.

A VA loan with full entitlement has no loan limit at all. That is the only one of the four ceilings that simply does not exist on one of the three programmes.

Sources: FHFA 2026 conforming loan limits; HUD 2026 forward mortgage limits; HUD Handbook 4000.1 on the base loan amount.

Mortgage insurance is part of the ratio

It is not a side charge, it sits inside the payment the ratio is measured against, so it reduces the price you qualify for.

On a conventional loan the premium is priced by loan-to-value and credit score together, and the spread is enormous: at 95% loan-to-value the factor at a 760 score is roughly a third of the factor at 620. This is the one place on this page where a credit score changes the answer, and it is why twenty points can be worth real money.

FHA charges everyone the same premium regardless of score, which is precisely why FHA is often the better answer at a lower score and the worse one at a high score. VA charges no monthly mortgage insurance at all.

The premiums used here are a representative national rate card for planning. An actual premium is quoted by the insurer on the real file.

The qualifying rate, and what this page does not model

The rate in the form is yours to set and nothing on this page adjusts it. It is not a quote, and no rate shown or implied here is available for lock.

What is not modelled: down payment assistance, seller or lender credits, gift funds as a separate source, non-occupant co-borrowers, self-employed income calculations, rental income, asset depletion, reserve requirements above the cash tested here, multi-unit properties, manufactured housing, condominium project approval, and any lender overlay that sits above agency guidelines. Any of these can move the answer in either direction.

Nor does it model an adjustable rate, where the qualifying rate is not the note rate, that has its own calculator.

What "pre-approved" actually means

Nothing on this page is a pre-approval, and the difference is not a technicality. A pre-approval means a lender has pulled your credit, examined income and asset documents, and run the file through an automated underwriting system. It produces a decision on your actual figures rather than the ones you typed.

The number here is meant for the stage before that: deciding whether to start, and knowing which of your own figures to work on first. A seller will not take it, and should not.

Common Questions

The rules behind the numbers above, in plain language.

How much house can I afford on my income?

There is no answer from income alone, which is why every calculator that asks for only your income is guessing. The same income produces wildly different maximums depending on what you already owe each month, how much cash you have, what the property taxes are where you are buying, and which programme you use.

What income does tell you is the ceiling on your payment: your monthly debts subtracted from a percentage of your gross income. Turning that payment into a price then depends on the rate, the taxes, the insurance and the mortgage insurance, and the price that comes out is only your maximum if cash and the county limit do not stop you first.

What debt-to-income ratio do I need to buy a house?

It depends on the programme, and two of the three have no fixed ceiling.

Conventional stops hard at 50% through Desktop Underwriter. FHA publishes 31% and 43% as guidelines, but a loan approved by the TOTAL Scorecard is not bound by them. VA has no ratio ceiling at all, 41% is a guideline above which the file needs residual income 20% above the requirement or a written justification.

So the honest answer is that the ratio is a ceiling on conventional and a signal everywhere else.

Why does this show three different maximum prices?

Because you are three different borrowers to three different rulebooks. They disagree about how much you must put down, how your student loans are counted, what mortgage insurance costs you, how large a loan the county permits, and what test you have to pass.

The differences are not small. It is routine for the spread between the highest and lowest of the three to be six figures on the same income and the same debts.

Which is better, FHA or conventional?

Neither, in general. At a lower credit score FHA is usually better, because FHA charges every borrower the same mortgage insurance premium while conventional prices it by score, at 620 the conventional factor can be three times the one a 760 pays, and FHA does not care. At a high score conventional is usually better, because its premium gets very cheap and it comes off when you reach 78% of the original value, while FHA's runs for the life of the loan on anything above 90%.

The crossover is real and it moves with the market. That is what the comparison above is for.

Does a student loan I am not paying still count against me?

On FHA, yes. FHA uses your documented payment, and where that payment is zero it uses 0.5% of the balance, so a $0 never counts as $0. On a conventional loan, a verified $0 payment under an income-driven plan qualifies at $0, but a loan that is deferred or in forbearance is counted at 1% of the balance. On VA it is excluded entirely if repayment begins more than twelve months after closing.

This single difference is frequently the largest one between the programmes for a younger borrower, and it is worth checking before deciding anything else.

Should I pay off my car to qualify for more?

Only if your ratio is what is binding you, and only if paying it off does not take the cash you need to close. Those two things are frequently in direct conflict, and clearing a debt with money you needed at the table simply swaps one ceiling for another.

The lever panel above runs this properly: it re-solves the whole model with the debt removed and shows what actually happens to the maximum price, including the case where the answer is nothing at all.

One thing worth checking first: an instalment debt with ten or fewer payments left may already be excluded, in which case paying it off buys you nothing.

How much cash do I need?

The down payment, plus closing costs, plus prepaid taxes and insurance. On a $600,000 purchase with 5% down that is $30,000 of down payment and often another $15,000 to $20,000 of costs and prepaids.

Cash is the binding constraint on a very large share of first purchases, and when it is, the useful conversation is about seller credits, lender credits, gift funds and down payment assistance, none of which touch your ratio, and all of which move this ceiling.

Is VA residual income really more important than the ratio?

On a VA loan, yes. It is the test that governs, and it is the one that most often decides the maximum, ahead of the ratio, the cash and the loan limit.

It also behaves differently from a ratio: because the requirement is a fixed dollar amount by household size and region rather than a percentage, a larger household needs more left over on the same income, and a larger house needs more again through the maintenance allowance.

Why is the comfort number so much lower than the approval?

Because they measure different things. An underwriter asks whether the documented income supports the documented obligations. Nobody at that desk is asked about childcare, commuting, saving, or what you want your life to look like, none of which appear on a credit report.

The comfort figure here is one stated rule, and you can change the percentage in the form. Its only real job is to make the gap visible so it is a decision rather than an accident.

Does my credit score change how much house I can buy?

On a conventional loan, yes, through mortgage insurance, the premium is priced by score and loan-to-value together, and moving up a score band lowers the monthly premium, which lowers the payment, which raises the price you qualify for. It also affects the rate you are offered, which this page does not attempt to guess.

On FHA it does not: every borrower pays the same premium. On VA there is no monthly mortgage insurance to price at all.

What is the 28/36 rule, and should I use it?

It is a rule of thumb: housing at or below 28% of gross income, total debts at or below 36%. No agency requires it and no automated underwriting system applies it.

It is not useless, as a budgeting instinct it is reasonable, and it is roughly where the comfort figure on this page starts. But it is not what anyone will underwrite you to, and using it as an affordability ceiling will understate what you can buy, sometimes by a great deal.

Can I use this as a pre-approval?

No. It is an estimate from figures you typed, and nothing here has been verified. A pre-approval requires a credit report, income and asset documentation, and an automated underwriting decision on the real file.

Use this to work out which of your own numbers to fix first, and what to ask about. Then get pre-approved before you write an offer.

Do property taxes really change what I can afford?

A great deal. Taxes sit inside the payment the ratio is measured against, so a county at 2.2% instead of 1.1% cuts the price you qualify for substantially on the same income.

The same is true of association dues, which count in full, and of homeowner's insurance, which has moved sharply in several states. Two identical buyers in two counties are not approved for the same price.

What if I am self-employed?

The mechanics above still apply, but the income figure is the hard part and this page cannot work it out for you. Qualifying income for a self-employed borrower is generally a two-year average of net income after deductions, with certain items added back, and it is often far lower than what the business takes in.

Put your best estimate of that figure into the income field rather than your revenue or your deposits, and treat the result as provisional until someone has read the returns.

Important disclosures

Taylor Weiner, mortgage loan originator, NMLS #263090  ·  Lower, LLC, NMLS #1124061  ·  5950 Symphony Woods Road, Suite 312, Columbia, MD 21044  ·  (714) 658-4912  ·  tweiner@twteam.com  ·  Verify licensing at nmlsconsumeraccess.org. Licensed to originate residential mortgage loans in California.

Not a government agency. The TW Team at Lower is not affiliated with, acting on behalf of, or endorsed by HUD, the FHA, the VA, the USDA, the FHFA, Fannie Mae, Freddie Mac or any other government agency. This page is not a government publication and has not been reviewed or approved by HUD, by the FHA, by the VA, by the USDA or by any other government agency. FHA loans are insured by the Federal Housing Administration and VA loans are guaranteed by the Department of Veterans Affairs; both are originated by approved lenders, not by the agencies themselves.

This calculator is an educational estimate based on figures you enter. It is not a pre-approval, an offer of credit, or a commitment to lend. No rate on this page is offered or available; the rate field opens on an example figure you are expected to replace, and nothing on the page adjusts it. This page publishes no lender’s qualifying guidelines, the ratios, limits and premium schedules cited are the agencies’ own published rules, and the decision on any file is made by underwriting on documented figures rather than by this page.

Where the rules on this page come from

Debt-to-income maximums and the treatment of monthly obligations, including student loans, instalment debts with ten or fewer payments remaining, lease payments and revolving accounts: Fannie Mae Selling Guide B3-6-02 and B3-6-05.

FHA qualifying ratios, the TOTAL Scorecard exception to the compensating-factor requirement, mortgage insurance premiums and the definition of the base loan amount: HUD Handbook 4000.1 and HUD published guidance. FHA student loan treatment: Mortgagee Letter 2021-13.

VA residual income requirements, the four regions, the 41% ratio guideline and the 20% residual cushion above it: 38 CFR 36.4340(c), with the ratio guideline at (d) and the residual income tables at (e), and VA Pamphlet 26-7, Chapter 4. VA treatment of deferred student obligations: VA credit standards.

2026 conforming loan limits: Federal Housing Finance Agency. 2026 FHA forward mortgage limits: HUD. Both are applied county by county from the published files.

Conventional mortgage insurance factors are a representative national rate card used for planning, not a quote from any insurer.

Scope and limits of this calculator

This page estimates a maximum purchase price by solving backwards from figures you enter. It is not a pre-approval, not a commitment to lend, and not an offer of credit. No rate shown on this page is a quote, and nothing on the page adjusts the rate you type in.

It models four constraints: the debt-to-income ratio, cash to close, the county loan limit, and VA residual income. It does not model down payment assistance, seller or lender credits, gift funds as a separate source, non-occupant co-borrowers, self-employed income calculation, rental or other non-wage income, asset depletion, reserve requirements beyond the cash tested, two- to four-unit properties, manufactured housing, condominium project eligibility, or lender overlays above agency guidelines.

Property taxes, homeowner's insurance and closing costs are entered as percentages and are estimates; all three vary by county, by property and by carrier, and all three change the answer. Mortgage insurance is estimated from a representative rate card. Prepaid items are approximated as three months of taxes and insurance.

The comfort figure is not a guideline, an agency rule or a recommendation. It is a single stated percentage of gross income, shown so that the gap between what a lender will approve and what a household can carry is visible rather than invisible. The percentage is yours to change.

⌂ Equal Housing Opportunity. Lower, LLC is an Equal Housing Lender. We do business in accordance with the Federal Fair Housing Act and the Equal Credit Opportunity Act.

Loan limits, premium schedules and regulatory citations current as of September 2026. Conforming and FHA limits change annually, normally announced in late November or early December for the following year.