VA Residual Income Requirements for Veterans

Anytime someone wants to partake of the American Dream and own a home, they must go through a series of  checks and balances.  One of them is the capacity to make the payments every month.  This is calculated by determining the total debt ratio which is the gross monthly income divided by the total monthly debts; including the new mortgage payment.  Usually, this is it when doing FHA or conventional loans. The VA, however,  has a step that trumps the debt-to-income ratio, called residual income, which has minimum standards depending on loan size, family size and geographical location.  The VA’s minimum residual income, which is also considered the balance available for family support, is a guide  and should not automatically trigger an approval or rejection of a VA loan.  Instead, it is considered in conjunction with all other credit factors.  An obviously inadequate residual income alone can be a basis for denying a VA loan. Sometimes the residual income can be marginal, but the VA can also look at other compensating factors such as good credit, monthly reserves and how the Veteran applying has handled their past housing expense.

The VA’s debt-to-income ratio is a guide and is an underwriting factor, however, it IS secondary to the residual income calculation.  Over the years, I have done many VA purchases and I have seen Veterans get approved and buy a home with over 55% DTI as long as they met the minimum residual income requirement.  I will now list what the requirements are in a table format:

Table of Residual Incomes for loan amounts of $79,999 and below

Family Size Northeast Midwest South West
1 $390 $382 $382 $425
2 $654 $641 $641 $713
3 788 772 772 859
4 888 868 868 967
5 921 902 902 1,004

Over 5  Add $75 for each additional family member up to 7

Table of Residual Incomes for loan amounts of $80,000 and above

Family Size Northeast Midwest South West
1 $450 $441 $441 $491
2 $755 $738 $738 $823
3 909 889 889 990
4 1,025 1,003 1,003 1,117
5 1,062 1,039 1,039 1,158

Over 5  Add $80 for each additional family member up to 7

Here are the states that fall into the regional locations determined by VA


Connecticut, New Hampshire, Pennsylvania, Maine, New Jersey, Rhode Island, Massachusetts, New York, Vermont


Illinois, Michigan, North Dakota, Indiana, Minnesota, Ohio, Iowa, Missouri, South Dakota, Kansas, Nebraska, Wisconsin


Alabama, Kentucky, Puerto Rico, Arkansas, Louisiana, South Carolina, District or Columbia, Mississippi, Texas VA loan, Florida VA loan, North Carolina VA loan, Virginia, Georgia, Oklahoma, West Virginia


Alaska, Hawaii, New Mexico, Arizona, Idaho, Oregon, California, Montana, Utah, Colorado, Nevada, Washington

Some might consider the residual income to be a deterrent, but I feel just the opposite.  With other loans as soon as you go over a certain DTI then the loan can be denied on the spot, but with VA that sometimes is not the case.  It gives the Veteran an additional outlet for approval which is especially nice during these hard economic times.

5 thoughts on “VA Residual Income Requirements for Veterans

  1. Debt to income is higher than 41%, but i believe i have the residual income. I am looking to refi my primary home. I had to borrow from a private lender at 10% int rate. I desperately need help with this. 315-886-9426…SFC Steinbacher

  2. I don’t understand why its $80’000 and below. What home are you going to find for that amount that isnt in a cracked out neighborhood? This irritates me. Also the lender we tried to go through to qualify for the home loan refused to calculate my spouse’s salary correctly, despite him correcting her several times EXP: he works a guaranteed 50 hrs a week plus time and a half over 40 hrs and get commision on top of it all…she kept saying ” i have to put you down as working 40 hrs a week” ommiting hundreds of dollars of our monthly income. I was so upset after dealing with them

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