We built a bisic Mortgage Calculator below, to get a general idea of the loan payment. It does not include property taxes, any HOA fee, or insurance, so keep that in mind. We also included an interactive map to get a general per capita income for your area. Some areas like California or New York for example may cost more per square foot to build, so smaller homes or multifamily options could be considered.

When considering affordability for a $250,000 home (or loan amount for construction costs in our hypothetical American Dream Lottery program), it's important to evaluate it against the average per capita personal income in your state. In this scenario, we're assuming a total property value of approximately $340,000, including a 3,500 sq. ft. lot valued at $90,000 provided at no cost. The house itself would be around 1,667 sq. ft., based on Phoenix, AZ-area build costs of $150 per sq. ft.

Using a 3% interest rate on a 30-year fixed HUD (FHA) loan with no down payment and no mortgage insurance:

• Principal and Interest: $1,054/month.
• Estimated Additional Costs (scaled to $340,000 property value): $507/month for property taxes (~0.6% rate, $170/month), home insurance (~0.6% rate, $170/month), and HOA ($167/month).
• Total Monthly Payment: $1,561.

Affordability is typically assessed using FHA's debt-to-income (DTI) guidelines, where housing costs should not exceed 31% of gross monthly income (assuming no other debts). This means you'd need at least $5,035 in monthly income, or about $60,420 annually, to qualify under standard rules. With strong credit or other factors, FHA allows up to 46.9% DTI, lowering the minimum to around $39,936 annually.

To see if this is realistic for the average person in your state, refer to the interactive map below showing BEA per capita personal income (latest 2023 annual data from BEA, as quarterly 2025 figures focus on changes rather than absolutes). Find your state's income and compare:

• If your state's per capita is $60,420 or higher, a $250,000 home could be affordable for the average earner (DTI ≤31%). Examples: 
  • Arizona: $61,652 (DTI ~30.4% – affordable).
  • California: $80,423 (DTI ~23.3% – very affordable).
  • New York: $79,581 (DTI ~23.5% – very affordable).

• If below $60,420, it might be a stretch under standard guidelines, though possible with higher DTI allowances or program assistance.  Examples: 
  • Mississippi: $48,110 (DTI ~39% – over 31%, but possible at 46.9% DTI).
  • West Virginia: $52,585 (DTI ~35.6% – borderline).
  • Alabama: $53,175 (DTI ~35.2% – borderline).

A smaller home could also be built, to reduce the cost to under $250,000 so that a lower income individual could qualify for home ownership.

Based on U.S. Census Bureau data analyzed by the National Association of Home Builders (NAHB) for contractor-built (custom) homes, which reflect the contract price for building the home itself (including materials, labor, overhead, and builder profit, but excluding land costs). These are median values, with ranges provided where sub-regional (division-level) data varies within a region.

• Northeast: $188–$190+ per square foot (based on Middle Atlantic division at $188; New England half of homes above $190, indicating a higher median).
• Midwest: $186 per square foot (based on East North Central division; West North Central data not separately detailed).
• South: $129–$155 per square foot (ranging across divisions: $129 in East South Central, $138 in West South Central, $155 in South Atlantic).
• West: $167–$169 per square foot (ranging across divisions: $167 in Pacific, $169 in Mountain).

Note: These figures provide a more accurate view of home construction costs alone, as opposed to total sales prices that include land and other expenses. Actual costs can vary based on home size, quality of finishes, local regulations, and economic factors. For comparison, the national median for contractor-built homes in 2024 was $166 per square foot.

• National Association of Home Builders. (2025). Cost of constructing a home-2024. https://www.nahb.org/news-and-economics/housing-economics-plus/special-studies/special-studies-pages/cost-of-constructing-a-home-in-2024
• National Association of Home Builders. (2025). How do median square-foot prices differ by region? https://www.nahb.org/blog/2025/10/square-foot-prices