How much income do I need to buy a $400,000 house?

Working backwards from the price

A $400,000 home in 2026 with 5% down ($20,000), a 6.75% 30-year rate, average 1.1% property tax, 0.4% insurance, and monthly PMI runs about $2,900/month all-in. That number is what your income has to support.

At a conservative 28% front-end DTI, you need about $125K in gross annual income ($10,357/mo). Most lenders will actually approve you at 36%–43% back-end DTI, which drops the required income to $85K–$95K if you have modest other debt. Stretched FHA underwriting (50%+ DTI) can qualify a $70K borrower with strong compensating factors — but that's tight.

The cash you actually need at closing

Down payment is only part of the picture. For a $400K purchase you should plan for:

• Down payment: $14,000 (3.5% FHA) to $80,000 (20% conventional)
• Closing costs: $10,000–$15,000 (loan fees, title, escrows, prepaid taxes/insurance)
• Reserves: 2–6 months of PITI ($5,800–$17,400)

Total cash to close: $30,000 at the low end (FHA + seller credits), $110,000+ at the high end (20% conventional with full reserves).

Programs and tradeoffs at $400K

FHA is aggressive: $14,000 down, but you'll pay upfront MIP (1.75% = $6,930 financed) and monthly MIP for the life of the loan.

Conventional 5% down is the most popular path: $20,000 down, monthly PMI that drops off at 78% LTV.

VA (if eligible): $0 down, no PMI, best pricing available.

USDA works only in eligible ZIPs and income-cap counties — many $400K homes are in areas that fall outside USDA eligibility.