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The average square footage of a house in the United States is 2,430 square feet, according to the National Association of Home Builders. That figure varies significantly from state to state, however, with averages ranging from 1,164 square feet all the way up to 2,800 square feet.

Average home sizes tend to be larger in areas where prices are lower and smaller in more expensive locales, though other factors also come into play. Understanding the average square footage of houses in your area can help you set realistic expectations for your house hunt and determine how much house you can afford.

Home Square Footage Trends in the U.S.

The size of homes in the U.S. has grown significantly over the past several decades. In 1949, the average square footage of a house for one family was 909 square feet. By 2021, it had almost tripled to 2,480 square feet, according to American Home Shield’s American Home Size Index.

One of the reasons behind expanding home sizes was American migration to the suburbs following World War II. During these years, new highways were built, demand for housing grew, and homeownership rose. People moved into bigger houses with more land outside the densely packed cities.

Overcrowding decreased at the same time. In 1950, 15.7% of U.S. homes were considered overcrowded. By 2000, the proportion had dropped to 5.7%. Today, older homes tend to have smaller floor plans, while more recent constructions are more spacious.

That said, home sizes have decreased slightly in the past few years due to rising interest rates and home prices. Home size was larger during the pandemic when interest rates reached historic lows and homebuyers were often looking for a house that could be home, workplace, and school all at once. Home sizes trended downward in 2022 and 2023 as housing became less affordable. (Learn more about how to save money for a house.)

Still, the mean square footage for new single-family homes was 2,430 square feet in the third quarter of 2023, a huge increase from the 909-square foot average of 1949.

States With the Largest Average Homes

The state with the largest homes on average is Utah, with an average home size of 2,800 square feet. Following Utah are other states in the Mountain West, including Colorado, Idaho, and Wyoming. This chart shows the 10 states with the largest average home sizes in the U.S., along with their median price per square foot.

State	Average home square footage	Median price per square foot
Utah	2,800	$259.05
Colorado	2,464	$279.55
Idaho	2,311	$286.85
Wyoming	2,285	$189.87
Delaware	2,277	$223.75
Georgia	2,262	$180.61
Maryland	2,207	$234.53
Montana	2,200	$324.53
North Dakota	2,190	$139.12
Washington	2,185	$335.73

States With the Most Expensive Cost per Square Foot

In states with a high cost per square foot, homes tend to be smaller on average. The smallest homes are in Hawaii, where the median price per square foot is nearly $744. New York has the next-smallest real estate, with a median price per square foot of more than $421. (New York City, however, has a median price of $1,519.57 per square foot.)

That said, home prices and size don’t always have an inverse relationship. California has some of the most expensive real estate in the country, but its home sizes average 1,860 square feet. Along with cost per square foot, some other factors that influence average home size include income levels and age of the homes.

This chart shows states with the highest median price per square foot, along with their average house sizes. If you’re looking to buy in a less pricey locale, consult a list of the best affordable places to live in the U.S.

State	Median price per square foot	Average home square footage
Hawaii	$743.86	1,164
California	$442.70	1,860
New York	$421.49	1,490
Massachusetts	$398.77	1,800
Washington	$335.73	2,185
Montana	$324.53	2,200
Oregon	$307.86	1,946
Idaho	$286.85	2,311
Nevada	$281.85	2,060

Recommended: 12 Tips for First-Time Homebuyers

What to Consider When Buying a Larger Home

Buying a larger home might be appealing if you have a growing family and want space to spread out, but it could have downsides. These are some of the factors to consider before splurging on extra space:

More expensive maintenance costs

Not only may a larger home have a higher initial price tag, but it could also cost you more in maintenance costs. Home repair projects can easily cost thousands of dollars apiece, and prices only go up when you have more house to maintain. Before opting for a big home, consider what shape it’s in and any potential renovation costs. You could also do some research on the cost of services in your area to estimate future expenses.

More time to clean and organize

Larger homes take longer to clean and organize than smaller ones. You’ll have to purchase more furniture and spend more time on general upkeep. If you hire cleaners for your house, the cost of each visit will be higher if you have additional rooms that need cleaning.

Located farther from city center

Homes in and around a city are often smaller, while houses with more square feet and land are typically located outside of the urban center. This may not be ideal if you prefer to live near restaurants, theaters, and other urban activities. It could also be a downside if you work in the city and would have a longer and more expensive daily commute.

A bigger carbon footprint

A larger home will require more heat in the winter and air conditioning in the summer. Not only will your energy bills cost more, but your bigger house will use more resources and have a greater impact on the planet. Some newer constructions may offset this footprint with energy efficient features.

Recommended: Tips to Qualify for a Mortgage

How Much Square Footage Can You Afford?

Before starting the house hunt and the quest for a mortgage loan, it’s worth considering how much square footage you can afford. Even if you get preapproved for a mortgage of a certain amount, you might prefer a smaller loan with lower monthly costs to avoid over-burdening your budget. Many first-time homebuyers opt for a smaller starter home before eventually upsizing. One way to figure out how much house you can afford is with the 28/36 rule.

The 28/36 Rule

The 28/36 rule is a guideline that can help you estimate what price house you can afford. This rule suggests spending no more than 28% of your gross monthly income on housing costs and no more than 36% on all your debt combined, such as housing costs, car payments, and student loans.

Let’s say, for example, that your monthly gross income is $6,000. Using this guideline, you’d want to keep housing costs at $1,680 per month or lower. If you have other debts, you wouldn’t want to spend more than $2,160 on those debts and housing costs combined.

Key Reasons to Purchase a Smaller Home

Purchasing a smaller home can have several benefits, including:

•   Smaller mortgage: A smaller home may have a lower cost, so you might be able to put down a lower down payment and take out a smaller mortgage.

•   More affordable bills: With less square footage, you’ll have lower monthly bills when it comes to electricity, heating, and cooling. Plus, you won’t have to pay as much in property taxes.

•   Easier and cheaper maintenance: Smaller homes can be easier to clean and maintain, and you won’t have to spend as much on furniture and decorations.

•   Extra room in your budget for other goals: If you’re saving money on housing, you’ll have more money for other things, such as home renovation projects, travel, investing for the future, and dining out.

The Takeaway

The average home square footage in the U.S. is more than 2,000 square feet, but sizes have slightly decreased recently with rising costs and interest rates. Home sizes also vary greatly by state, with the average square footage in some states more than double that in others.

Before splurging on a big house, consider your budget carefully. Use the 28/36 rule to estimate how much house you can afford, and take your other financial goals into account when considering how much you want to spend on housing each month. With careful planning, you can find a house size that meets your needs without overstretching your budget.

FAQ

Are basements included in home square foot calculations?

Basements may or may not be included in home square foot calculations, depending on the state where you live and condition of the basement. If the basement is included, it generally must meet certain criteria for living space, such as having an entrance and exit point that leads outside the home.

How much square footage does a family of four need?

While everyone’s needs are different, one guideline for determining the ideal square footage for one’s family size is 600 to 700 square feet per person. For a family of four, that would be a home with 2,400 to 2,800 square feet.

Is the average house size in the U.S. increasing or decreasing?

The average house size in the U.S. increased significantly over the past 75 years from 909 square feet in 1949 to 2,430 square feet in 2023. However, the past couple of years have seen a slight decrease in house sizes due largely to rising interest rates and worsening affordability.

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Photo credit: iStock/years

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.


Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOHL-Q324-006

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You’ve found it: your dream home. And it’s dreamy enough that you’ve put in an offer. But then the appraiser comes back with its report — and the figure is substantially lower than the agreed-upon sales price. This difference is what’s known as an appraisal gap.

An appraisal gap can certainly be a major inconvenience in the homebuying process — but fortunately, there are options, including renegotiating with the seller or walking away from the sale entirely. Below, we’ll outline everything you need to know about appraisal gaps, including ways to deal with them.

Why Would an Appraisal Gap Occur?

An appraisal gap happens when the appraised value of the home you intend to buy is lower than the agreed-upon purchase price.

It’s possible that you’re in a hot real estate market, and buyers competing for homes are engaging in bidding wars that push up home prices beyond their material value. Even if you weren’t engaged in a bidding war yourself, the seller’s price might reflect a rapid rise in local market prices.

Or maybe the seller simply overestimated when setting their asking price. While a seller’s market increases the chances of an appraisal gap, sometimes they just happen — no matter what’s going on in the real estate market in your area. The property valuation the seller used to price the house may simply be different from the appraiser’s estimate.

Impact of Appraisal Gaps

Obviously, spending more on a home than it’s worth has a variety of consequences, both on the buyer’s finances and on the home purchase process itself. Here’s a closer look.

Effects on Home Purchase

If you’re like most Americans — and especially first-time homebuyers — chances are you’re planning to use a mortgage loan to purchase your home. But lenders don’t typically approve mortgages for more than the home’s fair market value. (In fact, it was probably your lender that required the home appraisal that showed the appraisal gap in the first place, for precisely this reason.)

Obviously, this means an appraisal gap could cause trouble for those trying to qualify for a mortgage by lowering the amount the bank is willing to lend and increasing the amount of cash the buyer needs on hand to successfully make the purchase.

Even if you could successfully take out a loan for more than the home’s appraised value, you’d be starting your purchase with negative equity, which would substantially lengthen the time frame it would take to start building wealth in your home. You can offset this by making extra mortgage payments (a process called mortgage curtailment) if you have the cash on hand to do so.

Financial Implications

Along with hitches in the homebuying process, an appraisal gap could have substantial financial implications, too. For example, you may need to dig up additional cash in order to cover the gap — or crack your knuckles and head back to the table to renegotiate with the seller.

In some circumstances, an appraisal gap might even cause you to walk away from the deal entirely — potentially leaving your earnest money (typically 1% to 2% of the purchase price) on the table. The specifics depend on the wording in your purchase contract, which we’ll come back to in just a minute.

What to Do if an Appraisal Gap Occurs

If you’re facing an appraisal gap, there are a few different ways to resolve it.

Renegotiate with the Seller

So long as you’re not contractually bound to cover an appraisal gap by an appraisal gap coverage clause in your contract, you may be able to renegotiate a new purchase price with the seller — one that lines up better with the home’s appraised value.

Cover the Gap Yourself

Perhaps the most straightforward way to resolve an appraisal gap is to simply pony up. Of course, this “simple” fix isn’t necessarily easy for every buyer, given that appraisal gaps can be on the order of tens of thousands of dollars — on top of all the other expenses that come up at the closing table. If you take this route, you might start by asking the seller to meet you in the middle, with each of you covering half the amount.

Dispute the Appraisal

It may be a hassle — and it may not result in any changes — but you could also ask your lender for a review of the appraisal to ensure the value was correctly calculated. You can make a reconsideration of value (ROV) request with your lender. An ROV lets you explain more about why you think the home is worth more than the original appraisal states, including any additional or updated information. You might even get a new appraisal done if your lender will allow it, but it would likely be an additional expense out of your pocket. If you had an appraisal waiver the first time (in which an automated tool is used to estimate the home’s value) you might request an in-person appraisal. But be warned that a second appraisal could return a home value that is higher or lower than your first appraisal.

Cancel the Contract

Finally, of course, if the appraisal gap is simply too much to bear, you can always walk away. Be forewarned, however: If you cancel without an appraisal gap contingency in your contract, you may lose the earnest money you’ve put on the table.

Preventing Appraisal Gaps

Which of the above options are available to you will depend, again, on your purchase contract, which may have an appraisal gap contingency or appraisal gap coverage clause written into it.

•   An appraisal gap contingency is a section of the purchase agreement that gives the buyer the right to walk away from the deal if an appraisal gap occurs, without losing the earnest money.

•   An appraisal gap coverage clause, on the other hand, states that the buyer is responsible for covering an appraisal gap. But it can also be used to cap how much of an appraisal gap you’re willing to cover as the buyer. For instance, it may say that you agree to cover an appraisal gap of up to $20,000 — but if the difference climbs beyond that, you have the right to walk away without financial penalty.

Writing in an appraisal gap coverage clause can be a useful tool in a seller’s market, when you’re bidding against other would-be purchasers. It can help ensure you don’t spend more than you can afford. On the other hand, if you’re unwilling to foot the bill of any appraisal gap whatsoever — even if it makes you a slightly less competitive buyer — consider adding an appraisal gap contingency to your contract.

The Takeaway

An appraisal gap — the difference between the appraised value of the home you’d like to buy and the agreed-upon purchase price — can be a fly in the home-purchase ointment. But not everything is lost, particularly if you have your purchase contract written in a way that circumvents the problem in the first place. If necessary, prepare to negotiate and possibly spend more out of pocket to complete your home purchase.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

Who is responsible for covering an appraisal gap?

It depends. If there’s an appraisal gap coverage clause in the purchase contract, the buyer is likely responsible for covering an appraisal gap — though only up to specified limits. (Appraisal gap coverage clauses are common in competitive markets, where sellers have more leverage.) However, if your contract includes an appraisal gap contingency, you may be able to take the seller back to the table and renegotiate a lower purchase price — or walk away from the sale entirely.

Can a low appraisal be challenged or appealed?

Yes. If you think the home has been valued at a lower price than is accurate, you can put in what’s called a reconsideration of value (ROV) request with your lender. An ROV gives you the opportunity to explain more about why you think the home is worth more than the original appraisal states, including any additional or updated information. However, it’s no guarantee that the appraisal gap will close 100% — or at all.

How common are appraisal gaps in the home-buying process?

Appraisal gaps don’t happen in the majority of sales — but they’re not uncommon, either. It’s somewhat more likely that an appraisal gap will happen in a hot real estate market, when multiple bids from prospective buyers could push the purchase price up beyond the home’s fair market value.

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Photo credit: iStock/andresr

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This article is not intended to be legal advice. Please consult an attorney for advice.

SOHL-Q324-018

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If you’re planning to sell an investment property or your own home this year, it’s important to be aware of the potential impact capital gains tax could have on your bottom line. Otherwise, you could end up with less money than you thought to put toward your next real estate purchase or another financial goal.

Fortunately, there are strategies that can enable sellers to avoid capital gains tax on real estate, either by legally deferring or avoiding paying taxes altogether on their real estate gains. Read on for some basic info on how the capital gains tax works and how you might be able to minimize the tax burden after a successful sale.

Understanding Capital Gains Tax on Real Estate

Selling a piece of real estate for more than you paid is usually something to celebrate — but don’t party too hard just yet. If the value of the property has increased substantially, you may have to make a hefty payment to the IRS to cover the capital gains tax on your profit.

The amount you might be taxed on your sale can depend on a few different details, including how long you owned the property, if it was your primary residence when you sold it, how much you made on the sale, and your household income that year. Here are some factors to consider:

Short-Term vs. Long-Term Capital Gains

The length of time you owned the property before selling it will determine whether your profit is a short-term or long-term capital gain. That could make a significant difference in how, and how much, it’s taxed — as well as in how to avoid capital gains tax on real estate sales.

•   If you sell the property after owning it for only a year or less, for example, the profit is considered a short-term capital gain, and you’ll be taxed at your ordinary income tax rate for the year you made the sale.

•   If you sell after holding the property for more than a year, on the other hand, the profit is considered a long-term capital gain, which makes it subject to preferential capital gains tax rates.

Long-Term Capital Gains Tax Rates

Whether you’re selling your primary residence or an appreciated investment property, the tax rate (0%, 15%, or 20%) that applies to your long-term capital gain will be based on your taxable income and filing status that year. Here’s what the rates look like for 2024:

Filing Status	0%	15%	20%
Single	Taxable income up to $47,025	$47,026 to $518,000	Over $518,000
Head of Household	Taxable income up to $63,000	$63,001 to $551,350	Over $551,350
Married Filing Jointly/ Surviving Spouse	Taxable income up to $94,050	$94,051 to $583,750	Over $583,750
Married Filing Separately	Taxable income up to $47,025	$47,026 to $291,850	Over $291,850

Potential Exemptions

Before you start calculating (and stressing out about) what you might owe, however, it’s important to note there are exemptions that might help you reduce or even avoid paying taxes on your capital gains. These include the “home sale exclusion,” which can be used by homeowners who are selling their primary residence, and the “1031 exchange,” which allows investors to defer the taxes on a real estate sale by reinvesting their profit into a similar property. Here’s a look at how each strategy might benefit you, depending on your specific circumstances.

Deferring Capital Gains Tax with a 1031 Exchange

A 1031 exchange (named for Section 1031 of the Internal Revenue Code) allows those who invest in real estate to defer the tax obligation on a property they’ve sold by using the proceeds to replace it with a similar, or “like-kind,” property. This is how it works:

Qualifying for a 1031 Exchange

The property used as a replacement in a 1031 exchange must meet three basic requirements:

•   It must be a long-term investment. The property can’t be a quick “flip.” And it can’t be your personal home.

•   It must generate income while you own it through rental or some other use. You can’t buy the property and just hold onto it with a plan to sell it later.

•   It must be of the same “character and class” as the property it’s replacing. The replacement property doesn’t necessarily have to be used for the same purpose as the one that’s been sold, though. As long as both properties are used as investment properties that earn income, they generally can qualify as a like-kind exchange.

Deadlines and Rules

You can make a direct swap with another property owner to complete a like-kind exchange — if you can find the right property for your purposes. More often, though, sellers use a qualified intermediary (QI) to facilitate a “delayed” exchange. With this type of transaction, proceeds from the sale of your original property go directly to the QI to hold in escrow, and you must find and purchase a replacement property within a preset timeline following two main deadlines:

•   The 45-Day Rule: Within 45 days of closing on the original property, you must designate a replacement property — or properties — in writing to the QI; and

•   The 180-Day Rule: You must close on the new property within 180 days of selling the original property.

These two periods run concurrently, so you may want to find a real estate agent who can help you locate a new property before you complete the sale of the old one. Make sure you’re familiar with how to get a mortgage loan and the different types of mortgage loans before you begin the process of closing on the original property, and line up a home mortgage loan for the new property, should you need one.

Reverse Exchanges

You also may choose to do a reverse exchange, using those same 45- and 180-day deadlines, and still qualify for the 1031 tax deferral. In this case, you would transfer a qualifying replacement property to an intermediary, identify a property you already own that you want to sell, and complete the sale within 180 days of closing on the new property.

Reporting a 1031 Exchange to the IRS

You must notify the IRS of the 1031 exchange by submitting Form 8824 with your tax return for the year the exchange took place. It’s important to hold on to financial documents and keep good records, including descriptions of the properties involved, closing dates, and other details of the transaction. (Because this can be a complicated process to complete and report, you may want to consult with a tax professional before proceeding.)

Recommended: Investment Property Mortgage Rates

Saving on Taxes with the Home Sale Exclusion

Investors aren’t the only ones who can benefit from a tax break when selling a property for a profit. A tax provision known as the Section 121 Exclusion, or “home sale exclusion” allows homeowners who meet specific requirements to exclude up to $250,000 (or up to $500,000 for married couples filing jointly) of capital gains from the sale of their primary residence. Here are some basics that can help you determine if you qualify.

Ownership and Use Tests

To use the home sale exclusion, you typically must meet these requirements:

•   You must have owned and used the home as your primary residence for at least two of the five years leading up to the date of the sale. The two years don’t have to be consecutive.

•   The home must qualify as your primary residence. For example, it should be the address used on state and federal IDs, voter registration, filing taxes, and utility bills. And you can only claim this exclusion once every two years.

Calculating the Taxable Gain

Here’s an example of how the home sale exclusion might work. Let’s say, Joe, who is single, buys a house for $200,000 and sells it three years later for $500,000. His profit is $300,000; but after applying his $250,000 exclusion, Joe would pay capital gains tax on only $50,000 of the profit.

Depending on what Joe’s taxable income is in the year he makes the sale, he could pay a capital gains tax rate of 0%, 15%, or 20% on this reduced amount.

Other Strategies to Minimize Capital Gains Tax

The 1031 exchange and home sale exclusion are two popular methods for minimizing the tax on real estate capital gains. But there are other strategies you may also want to consider to reduce the tax blow to your bottom line.

Installment Sales

If you make a large profit on your property sale and want to spread out your capital gains tax liability over a period of several years, you may want to look at the benefits of receiving installment payments from the buyer instead of a lump sum. With this method, you would pay capital gains tax only on the portion of the gain you receive each year until the property is paid off.

Let’s say you’re an older couple hoping to sell your home and downsize to a less expensive home purchase or a rental in retirement. Or maybe you’re a young couple planning to sell your home in a high-priced city in order to move to a less expensive location so one of you can stop working and stay home with the kids. An installment sale would allow you to reduce your upfront tax burden and could provide a reliable income stream when you make this big life change.

Tax-Loss Harvesting

Tax-loss harvesting is another popular option for reducing long-term capital gains. Here’s an example of how it might work:

Let’s say you made a big profit on a real estate deal, but you also suffered a large loss on a long-term investment held in a taxable investment account. You may be able to use (or “harvest”) that loss to offset some of the gains from your successful property sale. Or, if you have long-term investments that aren’t doing as well as you’d like, you might choose to sell them for less than you paid and use the loss to help offset your taxable gain.

If it turns out your loss is more than your gains, you also may be able to reduce your ordinary income by up to $3,000 in that tax year. And you can carry forward any remaining loss — up to $3,000 per year — to future tax years.)

Charitable Donations of Real Estate

If your list of financial goals includes charitable giving, donating real estate directly to a qualifying charitable organization — instead of selling it, paying capital gains tax, and then donating the profits — could help you maximize the amount of your gift. You also may be able to claim a tax deduction equal to the fair market value of the property during the tax year when the gift was made, which could significantly reduce your tax burden. With this strategy, both you and your favorite charity could benefit.

Recommended: Real Estate Listing Terms Decoded

Planning for Capital Gains Tax in Real Estate Investing

Navigating capital gains tax in real estate can be complex, which means planning is a must. Here are a few things to keep in mind whether you’re hoping to sell a property (or properties) this year or in the future.

Record-Keeping and Cost Basis

One of the best ways to reduce your capital gains tax is to make the most of all the reductions the IRS allows. But you’ll have to back up any costs you claim. So holding on to financial documents you receive while you own the property is imperative — including the original closing documents from your purchase, receipts from any major improvements you made, the real estate purchase contract and the closing documents from the sale. As a general rule, it’s smart to track home-improvement costs for any materials and labor that increase the value of the property (in other words, not general upkeep expenses).

This information will help you determine your property’s cost basis (or adjusted cost basis if you made major improvements), which is the value that will be assigned to your home or real estate investment for tax purposes.

Seeking Professional Advice

Another way to make sure you’re getting every tax break you can when you sell your property is to work with a financial professional who’s experienced in real estate taxation. This could help you keep more of your money after the sale and avoid making a misstep that could lead to an expensive IRS penalty.

The Takeaway

Understanding how to avoid capital gains on real estate, and doing some proactive planning, could make a big difference to the bottom line of a successful property sale. And the more money you can keep in your own pocket, the more you’ll have to put toward your other financial goals — including buying your next home or investment property.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ>

What qualifies as a like-kind property for a 1031 exchange?

A “like-kind” exchange doesn’t mean the old and new properties have to be exactly the same size or in the same neighborhood. But the net market value and equity of the replacement property must be the same as, or greater than, the property that’s been sold — and it must be in the U.S. The properties also should have a similar purpose (selling one rental property and acquiring another, for example).

Are there any time limits for 1031 exchanges?

Yes, there are two main deadlines you’re required to meet to successfully complete a 1031 exchange. First, within 45 days of closing on the original property, you must designate at least one replacement property in writing to a qualified intermediary. Next, you must close on the replacement property within 180 days of selling on the original property. These two time periods run concurrently.

Can you use a 1031 exchange for a primary residence?

A primary residence typically doesn’t qualify for a 1031 exchange. The properties involved must be used as an investment or for business.

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Photo credit: iStock/gorodenkoff

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.


Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOHL-Q324-004

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Living small can have big advantages — particularly when it comes to cost. With fewer square feet to build, maintain, and keep lit, cooled, and heated, a tiny house can be far cheaper than more traditional iterations of the American dream.

Still, not all tiny houses come with tiny price tags. While it’s possible to build an off-the-grid tiny house for $10,000, some luxury tiny homes cost $100,000 or more. On average, a tiny home costs just over $50,000 to build, not including the price of the land it’s sitting on, though purchasing a prebuilt tiny home could rack up a higher price tag.

What Is the Average Tiny House Cost?

While, as we’ve seen, the cost of a tiny house can range significantly, the average price is usually somewhere between $30,000 and $60,000, according to Porch.com. Compare that to the latest median sale price for a non-tiny home — $434,000, according to real estate giant Redfin. (That’s before accounting for peripheral expenses like closing costs.) Bear in mind, though, that tiny house prices generally don’t include the land where the house will be located or the cost of any water, sewer, or electrical service hookup.

That’s a pretty hefty difference, although of course the tight housing market has an effect on the cost of prebuilt tiny homes, too. It’s not uncommon to see tiny homes listed for close to (or even over) $100,000, especially in highly desirable areas.

Many tiny houses are so relatively low cost that they don’t meet the minimum threshold to qualify for a home loan, although there are different types of mortgage loans and you can shop around to find a lender that might finance your home.

Tiny House on Wheels vs. Foundation

As you may already know, tiny homes can be built on wheels (though they’re not usually as mobile as standard mobile homes) or built on a foundation just like a larger home. Along with giving their owners some flexibility when it comes to location, building a tiny house on wheels can also change the price tag.

According to data from The Spruce, a tiny house on wheels costs an average of $60,000 to $80,000, while those built into foundations start lower — at $35,000 — but can run substantially higher, to $180,000.

Many other factors also play into the overall tiny home cost, too, which we’ll take a closer look at next.

Recommended: How to Get a Mortgage

Factors Affecting Tiny Home Cost

What other factors affect your tiny home’s bottom line? Here are some of the most impactful.

Size and Square Footage

While “tiny” is a fairly open-ended description, according to builder United Tiny Homes, these structures are generally between 100 and 400 square feet. There is some wiggle room on either end, though, and 500-square-foot tiny houses aren’t unheard of.

As you might expect, the larger your tiny house is, the more materials it takes to build — and therefore, the higher its price is likely to be. Still, since even the largest tiny homes are so much less expensive than traditional homes, it may be worth it to have just a little bit more room to roam.

Building Materials

Another factor that’s true for tiny homes as well as their larger counterparts: The higher the quality of the building materials, the more expensive the tiny home is likely to be. (However, it may also be able to withstand the test of time better, lowering overall maintenance costs and actually saving you money over time.)

However, some tiny home builders save by using recycled or reclaimed materials, which can substantially lower the overall cost (though make the project more time- and effort-intensive).

Labor and Professional Services

Labor is, of course, another major factor. If you’ve got the skills to build your tiny home yourself — or the patience to learn them — you stand to save thousands of dollars on what you’d spend to have a professional builder do it for you. How much does it cost to build a tiny house when it comes to labor? Construction work usually starts around $20 per hour, depending on the specific project, and that’s not counting the cost of materials and any overhead a contractor would charge. Professionals such as a plumber or electrician can run into the hundreds of dollars per hour.

Of course, when it comes to tricky and even potentially dangerous aspects of building a tiny home, like running electricity, professional know-how might be worth the price if you’re an amateur.

Building vs. Buying a Tiny House

When you’re budgeting for buying a house, bear in mind that buying a premade tiny home could be a lot more expensive than building one yourself — but as we’ve seen, you can also rack up a large overall bill on building your own if you rely on professional labor to do so. Here are some other considerations to keep in mind as you decide which route is right for you.

Custom Build

Having the opportunity to literally dream up your perfect tiny home and bring it to life might be priceless to you — and, again, if you’re able to DIY the project from start to finish, it might cost you less than buying someone else’s already-built dream. However, working with a contractor and architect to draw the blueprint and build the entire home from scratch could be a lot pricier. The good news is, tiny homes are popular enough now that services specifically designed to build tiny homes are more readily available.

Prefab or Kit Homes

Looking for a good middle road between a custom-designed, DIY tiny home and buying one that’s ready to go? Tiny home kits are available for prices starting around $12,000 or so — although this figure of course doesn’t include the land the tiny home will need to sit on, or the labor it’ll take to get it from flat to 3-D.

Used Tiny Homes

Buying someone else’s used tiny home is an option that could save you money — or cost you more, if the house has been carefully flipped and staged and is well marketed. Used tiny homes on wheels may be less expensive than those on foundations, but lots of factors play in, including geographical location, materials used, and more.

Recommended: Mortgage Calculator

Cost-Saving Tips for Tiny House Living

Here are some best practices for minimizing tiny house cost:

DIY Construction

Once again, if you have (or can summon) the know-how to build your own tiny house from scratch, you can shave a substantial portion off the final price tag. Plus, you’ll be better prepared for inevitable maintenance projects down the line — which means the saving opportunities just keep going.

Repurposed and Recycled Materials

Using repurposed and recycled materials can lower the cost of the physical parts of your building. In some cases, recycled and repurposed materials are available for free — though you may “pay” in the time it takes to find them.

Off-Grid Living

Finally, setting your tiny house up for off-grid living saves you money on utilities and city services like trash and water. By utilizing solar panels and a composting toilet, you can make your tiny house ready for the great outdoors — and self-sustaining enough to forego the regular monthly bills.

The Takeaway

While the cost of a tiny home can vary significantly, it’s almost always substantially lower than the cost of traditional, larger American houses — which can give those who live tiny big gains in terms of financial freedom.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

What is the cheapest way to build a tiny house?

If you have the know-how, building your own tiny house from scratch with recycled and repurposed materials can save you thousands of dollars. Many knowledgeable tiny home owners have completed the project for under $10,000.

How much does it cost to hire a tiny house builder?

While labor costs vary substantially depending on where you live (and other factors), the cost of materials for most tiny homes is already around $50,000, and labor usually costs about $20 per hour. Which is to say, the overall cost to hire a tiny house builder can quickly approach $100,000, particularly if you want a custom design.

Can you get a loan for a tiny house?

Tiny homes are still a relatively new phenomenon, and some mortgage lenders’ policies have not yet been updated to work for them. Given their relatively low cost, the amount you need to borrow may be under the mortgage lender’s minimum. Personal loans are another option for those who want to finance a tiny house, but beware: Unsecured personal loans usually come at higher interest rates than secured mortgages, and the interest may not be deductible on federal taxes as it would with a traditional mortgage.

---

Photo credit: iStock/RossHelen

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.


Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOHL-Q324-001

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If you earn a minimum of $180,000 a year, you may be able to afford a $600,000 mortgage — as long as you don’t have any other significant debts. But the exact amount you may qualify to borrow — even if you’re in that income range or higher — may also depend on several other variables, including your credit score and down payment.

Read on for a look at how much income may be needed for a $600,000 mortgage, how income fits into the overall mortgage equation, and how lenders typically determine the mortgage amount a homebuyer can handle.

What Income Is Needed to Get a $600,000 Mortgage?

You might think the loan amount you’ll receive when you apply for a mortgage will be based mostly on your household income. But income is just one of several factors lenders generally consider when deciding how much someone can borrow.

The home mortgage loan a borrower can qualify for usually is based on how much the lender believes that person can reliably pay back. So the loan company will run your financials through a few different checks and calculations to come up with that number. Here are a few things lenders may look at when you apply:

Reliability of Income

Be prepared to be asked not only about your income but also how long you’ve had your job (or your business if you’re self-employed). When it comes to your income, if you want to get an idea of where you stand before you apply for a mortgage, an online home affordability calculator can help you estimate whether your income is high enough to afford a $600,000 loan. Or you might try prequalifying with one or more lenders.

Creditworthiness

Lenders will also check your credit score and credit reports to ensure that you’re financially responsible and pay your bills on time.

Down Payment Amount

Contrary to what many people believe, a 20% down payment isn’t required to get a home loan. First-time homebuyers may be able to put as little as 3% down with some lenders, or even less, depending on the type of mortgage they get. A larger down payment can help you lower your monthly payments, however, and it can show lenders you’re serious about your investment.

Debt-to-Income (DTI) Ratio

You can also expect lenders to compare your monthly gross income to your existing monthly debts (such as credit cards and student loans) to help assess if you’ll be able to manage all your payments. This calculation is called your debt-to-income ratio. (DTI = monthly debts ÷ gross monthly income.)

What Is a Good Debt-to-Income Ratio?

The Consumer Financial Protection Bureau (CFPB) advises homeowners to work toward maintaining a DTI ratio of 36% or less. And in general, that’s the number mortgage lenders are looking for, as well. But some lenders may accept a DTI ratio of up to 43% — or even higher if the borrower can meet other criteria on certain types of loans.

What Other Factors Are Mortgage Lenders Looking For?

Here are a few formulas your lender — and you — may use to determine how much house you can afford on your income.

The 28/36 Rule

The 28/36 rule combines two factors that lenders typically look at to determine home affordability: income and debt. The first number sets a limit of 28% of gross income as a homebuyer’s maximum total mortgage payment, including principal, interest, taxes, and insurance. The second number limits the mortgage payment plus any other debts to no more than 36% of gross income.

For example: If your gross annual income is $180,000, that’s $15,000 per month. So with the 28/36 rule, you could aim for a monthly mortgage payment of about $4,200 — as long as your total monthly debt (your mortgage payment plus car payment, credit cards, etc.) isn’t more than $7,200. With disciplined budgeting, you may be able to afford a $600,000 mortgage at this income level.

The 35/45 Model

Another calculation lenders might look at is the 35/45 method, which recommends spending no more than 35% of your gross income on your mortgage and debt, and no more than 45% of your after-tax income on your mortgage and debt.

For example: Let’s say your gross monthly income is $20,000 and your after-tax income is about $15,000. In this scenario, you might spend between $6,750 and $7,000 per month on your debt payments and mortgage combined. This calculation allows you to spend a bit more on your mortgage payment… as long as you aren’t carrying a heavy debt load.

The 25% After-Tax Rule

If you’re nervous about keeping up with your monthly mortgage payments, this formula will give you a more conservative amount to shoot for. With this calculation, your target is to spend no more than 25% of your after-tax income on your mortgage.

Keep in mind that these calculations can give you only a rough estimate of how much you can borrow. If you want to be more certain about the overall price tag and monthly payments you can afford, it may be helpful to go through the mortgage preapproval process.

What Determines How Much House You Can Afford?

Here’s something else to consider when determining how much income is needed for a $600,000 mortgage: A house payment isn’t limited to just principal and interest. And the extra expenses that may be tacked on every month can add up fast. Let’s examine the costs covered by a monthly loan payment:

Principal

Principal is the original amount borrowed to buy the home. Each month, a portion of your payment will go toward paying down this amount.

Interest

Interest is the money you pay to the lender each month for giving you the loan. The interest rate you pay can be influenced by personal factors (such as the loan length you choose, your credit score, and your income) as well as prevailing rates in the market.

Homeowners Insurance

The cost of homeowners insurance (coverage that protects your home and other assets from various risks), also may be rolled into your monthly mortgage payment. Your lender will then pay this premium when it’s due.

Mortgage Insurance

Depending on the type of loan you get and the amount you put down on your home, you may be required to carry private mortgage insurance (PMI) or some other type of mortgage insurance policy. This insurance is designed to protect the mortgage lender if a borrower can’t make the agreed-upon loan payments.

Property Taxes

A portion of your monthly mortgage payment may also go toward the property taxes you’ll pay to your town or city.

Recommended: Home Loan Help Center

$600,000 Mortgage Breakdown Examples

The monthly payment on a $600,000 mortgage can vary based on several factors, including the length of the loan (usually 15, 20, or 30 years) and the interest rate. A mortgage calculator can give you a pretty good idea of what your payments might be. Here are some examples of how the payments for a $600,000 mortgage might break down.

30-Year Loan at 6.00% Fixed Interest Rate

Total Payment: $4,562

Principal and Interest: $3,597

Other Costs (estimated PMI, homeowners insurance, and property taxes): $965

15-Year Loan at 6.00% Fixed Interest Rate

Total Payment: $6,028

Principal and Interest: $5,063

Other Costs (estimated PMI, homeowners insurance, and property taxes): $965

30-Year Loan at 7.00% Fixed Interest Rate

Total Payment: $4,957

Principal and Interest: $3,992

Other Costs (estimated PMI, homeowners insurance, and property taxes): $965

15-Year Loan at 7.00% Fixed Interest Rate

Total Payment: $6,358

Principal and Interest: $5,393

Other Costs (estimated PMI, homeowners insurance, and property taxes): $965

Pros and Cons of a $600,000 Mortgage

According to Redfin, the median home sale price in the U.S. in March 2024 was $432,812. So if you can qualify for a mortgage that’s around $600,000, there’s a good chance you’ll be able to find a pretty nice home — depending on where you live.

The downside of borrowing $600,000 is that your mortgage payments could take a sizable slice out of your income every month. If you’re cutting it close and you experience an unexpected expense or temporary job loss, you may have trouble staying on track. Before moving forward with a loan of this size, you may want to speak with a financial advisor and be sure the amount fits with your budget and your other goals.

Recommended: Best Affordable Places to Live in the U.S.

How Much Will You Need for a Down Payment?

A down payment is generally between 3% and 20% of the purchase price. The amount you’ll need for a down payment will depend on the cost of the home you plan to buy and the type of mortgage loan you get.

Can You Buy a $600,000 Home with No Money Down?

You may be able to get a mortgage without making a down payment if you can qualify for a government-backed loan from the U.S. Department of Agriculture (USDA) or a VA home loan from the U.S. Department of Veterans Affairs. These loans are insured by the federal government — which means the government will help pay back the lender if the borrower defaults on the loan.

Not all lenders offer these programs, and borrowers must meet specific requirements to qualify. But if you think you may be eligible, it could be an option that’s worth looking into.

Can You Buy a $600,000 Home with a Small Down Payment?

Some private lenders will accept as little as 3% down from a first-time homebuyer on a conventional mortgage, so don’t give up if you can’t get a no-down-payment loan.

You also may want to check out the requirements for a government-backed FHA loan, which allows buyers to make a down payment as low as 3.5%. There may be a limit on how much you can borrow with an FHA loan, depending on where you buy, but the 2025 limit in higher-cost areas can be as much as $1,209,750. And in Alaska, Hawaii, Guam and the U.S. Virgin Islands, the 2024 limit is $1,724,725.

Is a $600,000 Mortgage with No Down Payment a Good Idea?

There’s no question that coming up with a down payment can be an obstacle to homeownership — especially for first-time homebuyers. And the thought of skipping that step may be appealing if it could help you get into a home faster, or allow you to hold onto your savings for renovations, an emergency fund, or other financial goals.

It’s important to remember, though, that without a down payment it can take longer to build equity in your home. And though you won’t have to pay for mortgage insurance with a no-down-payment government-backed loan, you can expect to pay an upfront funding fee for a VA loan and an upfront and annual guarantee fee for a USDA mortgage. A mortgage professional can help you weigh the pros and cons of different types of mortgage loans and determine the best move for your individual circumstances.

What If You Can’t Afford a $600,000 Mortgage Even with No Down Payment?

Here are a few steps to consider if it turns out you can’t afford the payments on a $600,000 mortgage:

Pay Off Debt

If your DTI ratio needs work, you may want to suspend your home search and concentrate on paying down recurring debts like credit cards, car payments, or a personal loan. This could allow you to put more of your monthly income toward your mortgage payments.

Build Your Credit

Checking your credit reports can give you an idea of what lenders might see when they evaluate your creditworthiness. If there are any errors, you can take steps to fix them, and if you see something negative in your reports, you can work on doing better. If you use a credit-score monitoring service, you may already know what your credit score is and if it needs a boost. Conventional lenders typically look for a minimum score of 620 to 640.

Start Budgeting

Creating a budget and trimming some expenses could help you reach your debt-payment and savings goals. Remember: If you can come up with a bigger down payment, you may be able to borrow less, keep your monthly payments to a more reasonable amount, and pay less in interest over the life of the loan.

Alternatives to Conventional Mortgage Loans

If you can’t qualify for a conventional mortgage loan, you may have some alternatives to consider. Here are a few potential options:

First-time Homebuyer Programs

As mentioned above, you may qualify for a federal, state, or local first-time homebuyer program that can help lower your down payment, closing costs, and other expenses. There may be limits on the type of home you can buy or a cap on the home’s cost. But you might find it’s worth doing some research, or asking a mortgage professional, to see if you’re eligible.

Rent-to-Own

Another option may be to enter into an agreement to rent-to-own a home. With this type of arrangement, you start out renting, but the landlord agrees to credit a portion of your monthly payment toward purchasing the home. This can be a good way to start working toward homeownership if you can’t qualify for the mortgage amount that you want. But it’s important to understand the downsides of the deal — including that you might lose money if you change your mind about buying the home, or if the landlord has second thoughts about selling.

Owner Financing

With owner financing, the person who’s selling the home may serve as the lender for all or part of the purchase price. Just as with a rent-to-own home, there are risks to this kind of agreement, but it can make homeownership possible if a traditional loan isn’t available.

Mortgage Tips

No matter how much you plan to borrow, buying a home is a big step. Here are a few things you may want to do to prepare:

Work Out Your Housing Budget

Remember, your housing costs won’t be limited to principal and interest. It’s important to determine how much you might pay for insurance, taxes, homeowners association dues, maintenance, and other expenses before you make the leap to homeownership.

Find the Mortgage that Best Suits Your Needs

This may include deciding whether you want a:

•   fixed vs. variable interest rate

•   conventional vs. government-backed loan

•   shorter vs. longer term loan

Get Preapproved

Going through the mortgage preapproval process with a lender can give you a better idea of how much you can afford to spend on a home. And having preapproval may give you an edge over other house hunters in a tight market.

The Takeaway

Obtaining a mortgage is just one of many steps in the homebuying process, but it’s an important one. Taking the time to do some research could keep you from getting in over your head — or locked into a loan that isn’t a good fit.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

How much income do you need to qualify for a $600,000 mortgage?

If you make at least $180,000 a year, you may be able to qualify for a $600,000 mortgage, depending on how much debt you’re carrying and other variables.

How much is a $600,000 mortgage per month?

The monthly payment for a $600,000 mortgage can vary based on several factors, including the length of the loan and the interest rate. For example, a 30-year fixed-rate mortgage with a 7.00% interest rate could be $3,992 per month for principal and interest alone, while the principal and interest for a 15-year fixed-rate mortgage with a 7.00% interest rate could be $5,393 per month.

Can I afford a $600,000 house on a $100,000 salary?

It would be very difficult to keep up with the monthly payments or even qualify for a loan to buy a $600,000 house on a $100,000 salary — that is, unless you have additional income outside of your salary or make a very large down payment on the property.

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Photo credit: iStock/LumiNola

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.


Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
^†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.

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