Suppose someone makes $95k a year, has assets of $30k, no debt and
very good credit.  How expensive an apartment can he afford?

According to Affordable Housing Online, government agencies consider
30% of income to be the maximum affordable housing expense, inclusive
of utility payments. See:

Affordable Housing Online
http://www.affordablehousingonline.com/affordit.asp

The 30% figure is also found on the web site of the United States
Department of Housing and Urban Development. This figure is of course
based on assumptions about the other regular expenses faced by the
tenant. See:

CPD - Affordable Housing - HUD
http://www.hud.gov/offices/cpd/affordablehousing/index.cfm

Since you are stipulating someone with no debt and good credit, I will
assume that the maximum "affordable" level of 30% is acceptable for
this tenant. I will further assume average monthly heating expenses of
$50, electric expenses of $30 and water/sewage expenses of $20,
figures which are reasonable for most parts of the country. The HUD
web site does not specify after-tax income, so I will also assume that
30% of pre-tax income is acceptable.

One month's share of $95,000 is $7,916.67. 30% of this figure is
$2,375. Subtracting our estimated utility costs, we arrive at a
maximum acceptable rent of
$2,275 per month. This is the figure you requested: the most expensive
apartment the tenant in question can afford. As for how many rooms
this will obtain for him, and what sort of view, location, etc. he can
afford, this depends entirely on the location; I recommend searching
the rentnet.com site to obtain typical figures for various apartment
sizes in any area of interest. See:

RENTNET: Find Apartments for Rent
http://www.rentnet.com/apartments/home.jhtml?lnksrc=ts5

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Request for Answer Clarification by bugbear-ga on 01 Feb 2004 13:22 PST

Sorry, I meant how expensive an apartment can he afford to *buy*.
This is a question about mortgages.

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Clarification of Answer by majortom-ga on 01 Feb 2004 14:22 PST

According to the Affordable Mortgage Calculator service provided by
the American Banking Association, and assuming a 30 year mortgage, an
interest rate of 4.5%, 1% closing costs, a 5% down payment, closing
costs of $900, property taxes of $1,000 per year, and a total of $950
for homeowner's insurance (assumed $400) and condominium association
fees (assumed $550), the buyer can purchase a home costing
$430,458.77. Note that the entire $30,000 is committed to the down
payment in this case. The monthly total housing payment would be
$2,216.67, which is 28% of monthly gross income.

Affordable Mortgage Calculator
http://www.aba.com/aba/cgi-bin/howbigNT.pl

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Request for Answer Clarification by bugbear-ga on 04 Feb 2004 18:37 PST

Where do you get all these assumptions?  For example, is 4.5% actually
the going rate for mortgages?  And isn't a 5% down mortgage a bad plan?
What do you get if you put 10% down?

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Clarification of Answer by majortom-ga on 05 Feb 2004 11:24 PST

My assumptions about utilities are based on my own bills (as an
experienced owner, in a situation comparable to what you're
inquriing about, of two condominiums and a rowhouse in different
cities) and on comparisons with neighbors. The mortgage rate I
specified is not unusual for the last several years; you can obtain
the current rate offered by any bank usually just by walking in and 
looking at the "today's rates" sign, although you may do slightly
better with other mortgage lenders. Make sure you use a 
Fannie Mae approved lender (ask). 

If you wish to try a different set of assumptions you should
feel free to do so. Your question did not specify any of these
factors, or a particular area. I suggest you use the Affordable 
Mortgage Calculator that I linked to in my answer in order to get 
an exact answer for your situation. I hope this resolves
your concerns sufficiently. Thank you!

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Clarification of Answer by majortom-ga on 05 Feb 2004 11:30 PST

I also encourage you to read research_help-ga's comment below. He is
correct: the realtor.com calculator is much more realistic than the
rather optimistic calculator that I located and you should use that
one rather than the American Banking Association calculator. And of
course before making final plans you should certainly consult with a
real estate professional.

an ok answer; thanks.

I would suggest that the asker speak to a financial consultant or
mortgage broker or some other knowledgeable person and not rely on
this answer. I can assure you with 100% certainty that a person who
makes 95K a year and has assets of 30K could not afford, not would
they be approved by a lender to purchase a property that costs over
430K.

I plugged the numbers given into the Home Affordability calculator of
realtor.com. Assuming 95K income per year, 0 debt, excellent credit,
and 30K available for a down payment: a lender would approve financing
for a home that costs up to 300K.

My assumptions about utilities are based on my own bills and
comparisons with neighbors. The mortgage rate is close to current
rates. If you wish to try a different set of assumptions you should
feel free to do so. Your question did not specify any of these
details. I suggest you use the Affordable Mortgage Calculator that I
linked to in order to get an exact answer for your situation.