I’m Michael DiVita — DRE #01372066 | NMLS #241655, DiVita Home Finance (DRE #01818285 | NMLS #323700), Tiburon, CA. I’ve been in California mortgage lending since 2000 and founded DiVita Home Finance in 2007. I’m known as a creative mortgage broker: when a bank says no, I find the lender and the loan structure that can say yes. Call (800) 239-1103.
“How much house can I afford?” has two answers: what a lender will approve, and what you’ll be comfortable paying every month. In California they can be far apart, because prices are high and property taxes, insurance, and HOA dues add a lot on top of principal and interest. This guide shows how lenders do the math, what different incomes buy at today’s rates, what online calculators leave out, and how to stretch your budget without overextending.
How Lenders Decide What You Can Afford
Lenders use your debt-to-income ratio (DTI) — monthly debt payments divided by gross monthly income:
- Housing ratio (front-end): your full housing payment — principal, interest, property tax, insurance, mortgage insurance, and HOA dues — as a share of gross income. The classic comfort guideline is 28%.
- Total ratio (back-end): the housing payment plus car, student loan, credit card, and other debt payments. Limits depend on the program: Fannie Mae allows up to 50% with an automated approval; FHA’s manual-underwriting limits run from 31/43 up to 40/50 with compensating factors; VA uses a 41% benchmark plus residual income; most jumbo lenders cap around 43%–45%.
The maximum a lender will approve isn’t a recommendation. I usually show clients both numbers — the comfortable one and the maximum — so they can decide where they want to live. For the details on each program’s limits, see debt-to-income ratio for a California mortgage.
What Your Income Buys at Today’s Rates
The table shows an approximate purchase price at two levels: a comfortable 28% housing ratio, and a 43% ratio — a common lender maximum if you have no other debt.
| Annual income | Monthly gross | 28% housing payment | Approx. price at 28% | 43% housing payment | Approx. price at 43% |
|---|---|---|---|---|---|
| $80,000 | $6,667 | $1,867 | ~$284,000 | $2,867 | ~$436,000 |
| $100,000 | $8,333 | $2,333 | ~$355,000 | $3,583 | ~$545,000 |
| $120,000 | $10,000 | $2,800 | ~$426,000 | $4,300 | ~$654,000 |
| $150,000 | $12,500 | $3,500 | ~$533,000 | $5,375 | ~$818,000 |
| $200,000 | $16,667 | $4,667 | ~$710,000 | $7,167 | ~$1,090,000 |
| $250,000 | $20,833 | $5,833 | ~$888,000 | $8,958 | ~$1,363,000 |
| $300,000 | $25,000 | $7,000 | ~$1,065,000 | $10,750 | ~$1,636,000 |
| $400,000 | $33,333 | $9,333 | ~$1,420,000 | $14,333 | ~$2,181,000 |
| $500,000 | $41,667 | $11,667 | ~$1,775,000 | $17,917 | ~$2,726,000 |
Assumptions for illustration only: 20% down, 30-year fixed at 7.0%, property tax 1.2% of price per year, homeowners insurance 0.3% of price per year, no HOA, no other debts. Your numbers will differ.
Rules of thumb from the table: at these assumptions, a comfortable budget is roughly 3.5 times household income, and a lender’s maximum with no other debt is roughly 5.5 times. Every $500 a month of other debt lowers the maximum price by roughly $75,000. Rates matter too: on $200,000 of income at the 43% level, the price moves from about $1,136,000 at 6.5% to $1,090,000 at 7.0% and $1,047,000 at 7.5% — roughly 4% for each half-point.
For a single-income scenario in the Bay Area, see I make $150,000 — how much house can I afford in the Bay Area?
What Online Calculators Leave Out in California
- Property tax. Proposition 13 sets the general tax at 1% of assessed value, but voter-approved bonds and local assessments push most bills higher — and a purchase resets the assessed value to your price. Some newer communities add Mello-Roos special taxes. See Prop 13 for home buyers and Mello-Roos.
- Homeowners insurance. In wildfire-exposed areas, premiums have risen sharply and some buyers can only get the California FAIR Plan plus a wrap policy. Get a quote before you set your budget — see FAIR Plan and your mortgage.
- HOA dues and special assessments. They count fully in your DTI, and a pending special assessment can affect the loan itself — see HOA special assessments.
- Mortgage insurance. Below 20% down on a conventional loan you’ll pay PMI; FHA has upfront and annual premiums.
- Loan limits. Above your county’s conforming limit, you’re in jumbo territory, with stricter DTI and reserve requirements.
2026 Conforming Loan Limits in Key California Counties
The conforming limit decides whether you can use a conventional loan or need a jumbo. For 2026, the baseline is $832,750 and the high-cost ceiling is $1,249,125 for a one-unit home.
| County | 2026 one-unit limit |
|---|---|
| Alameda, Contra Costa, Los Angeles, Marin, Orange, San Benito, San Francisco, San Mateo, Santa Clara, Santa Cruz | $1,249,125 |
| San Diego | $1,104,000 |
| Ventura | $1,035,000 |
| Napa | $1,017,750 |
| San Luis Obispo | $1,000,500 |
| Monterey | $994,750 |
| Santa Barbara | $941,850 |
| Sonoma | $897,000 |
| Riverside, Sacramento, Placer, Solano, and other baseline counties | $832,750 |
See the full list at 2026 conforming loan limits in California.
Don’t Forget the Cash You’ll Need
Income gets you approved; cash gets you to closing. Budget for:
- Down payment: as little as 3% (conventional HomeReady or Home Possible, or other 3% programs), 3.5% for FHA, 0% for VA and USDA, and commonly 10%–20% or more for jumbo. See how much down payment you need.
- Closing costs: lender, title, escrow, and prepaid taxes and insurance. See California closing costs.
- Reserves: jumbo lenders commonly want several months to a year of payments in the bank after closing.
In Marin and other high-cost markets, the cash requirement is often a bigger hurdle than income. See jumbo loans in Marin County and Marin County home prices.
Ways to Increase What You Can Afford
- Count all your income. Bonus, overtime, commission, RSUs, and rental income can count with the right history — see RSU income.
- Self-employed? If your tax returns understate your cash flow, a bank statement loan can qualify you on deposits instead.
- Pay off, not down, small debts to remove the payment from your DTI.
- Add a co-borrower, including a non-occupant co-borrower on programs that allow it.
- Use down payment assistance. CalHFA’s MyHome program offers a deferred junior loan of up to 3.5% of the price with FHA or 3% with conventional, for first-time buyers within income limits. CalHFA’s Dream For All shared-appreciation loan serves first-generation buyers when funding is open. See down payment assistance in California.
- Change the structure. A rate buydown, an ARM, or a different program can lower the qualifying payment — each with trade-offs I’ll walk through with you.
Frequently Asked Questions
How much house can I afford on $100,000 a year in California?
At an illustrative 7% rate with 20% down and no other debts, roughly $355,000 at a comfortable 28% housing ratio and up to about $545,000 at a 43% ratio. That’s realistic in parts of the Inland Empire, Sacramento, and the Central Valley. In coastal markets you’d typically need more income, a co-borrower, or down payment assistance.
How much house can I afford on $200,000 a year?
Using the same assumptions, about $710,000 at a 28% housing ratio and about $1,090,000 at 43% with no other debts. Each half-point change in rate moves that maximum by roughly 4%.
How much house can I afford on $300,000 or $400,000 a year?
At 7%, 20% down, and no other debts: about $1,065,000 to $1,636,000 on $300,000, and about $1,420,000 to $2,181,000 on $400,000, depending on whether you target a 28% or 43% housing ratio. Loans above your county’s conforming limit are jumbo loans with stricter DTI and reserve requirements.
Is the 28/36 rule still realistic in California?
It’s a good comfort benchmark, but many California buyers go above it because prices are high. Lenders often approve higher ratios — up to 50% on some conventional loans — so the real question is what payment you’re comfortable with, not just what you can get approved for.
How does my credit score affect how much I can afford?
A higher score usually gets a lower rate and lower mortgage insurance cost, which lowers the payment and raises the price you can afford at the same income. On California loan sizes, even a modest rate difference can change your budget by tens of thousands of dollars.
What costs should I include besides the mortgage?
Property tax (1% base under Prop 13 plus local assessments), homeowners insurance, HOA dues, any Mello-Roos tax, and mortgage insurance if you put less than 20% down. All of them count in your DTI.
Related Resources
- Debt-to-Income Ratio for a California Mortgage
- $150K Income: How Much House in the Bay Area?
- Mortgage Calculator
- First-Time Home Buyer Guide
- 2026 Conforming Loan Limits
- Down Payment Assistance
- Pre-Approval Checklist
Official Sources & References
Talk to Michael Directly
DiVita Home Finance | Tiburon, CA | In lending since 2000, founded DiVita Home Finance in 2007. Michael DiVita DRE #01372066 | NMLS #241655. Company DRE #01818285 | NMLS #323700.
💬 Text: (310) 849-9124
