- The VA sets residual income guidelines to help ensure Veterans can afford everyday living expenses after buying a home.
- VA residual income measures how much money is left each month after paying major expenses, and the required amount varies by several factors.
- Some borrowers may be able to offset residual income requirements using other household income, depending on lender guidelines.
Residual income is one of the VA loan’s most important qualifying factors. Unlike traditional metrics that focus mainly on ratios, residual income offers a more practical view of your day-to-day financial comfort.
VA residual income is the discretionary income left over each month after paying all major expenses, including the mortgage payment. The residual income requirements vary by location, loan amount and family size.
The heart of this requirement is discretionary income. The VA wants to know that Veterans have enough residual income to cover things like gas, food, clothing and other typical family needs after the mortgage payment.
VA Residual Income Charts
VA residual income minimums reflect how housing costs and other expenses vary based on family size and where in the country you’re buying. That’s why larger families in the Northeast and the West need more residual income than similar families in the Midwest and South.
The VA also requires less residual income for borrowers with loan amounts below $80,000.
Here’s a look at the VA’s residual income charts by loan amount and region. Scroll to the third chart to see which region your state is in.
VA Residual Income Chart 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 | $976 |
| 5 | $921 | $902 | $902 | $1,004 |
VA Residual Income Chart for Loan Amounts Above $80,000
| 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 |
Key Geographic Regions for VA Residual Income Charts
| Region | States |
|---|---|
| Northeast | Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode, Island, Vermont |
| Midwest | Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin |
| South | Alabama, Arkansas, Delaware, DC, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, Puerto Rico, South Carolina, Tennessee, Texas, Virginia, West Virginia |
| West | Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming |
The VA instructs lenders to count all members of a household, including children from a previous marriage who depend on the borrower for financial support.
Lenders may be able to reduce the residual income requirement by 5% for active duty service members and borrowers purchasing within close proximity of a military installation. These borrowers may have access to cheaper, tax-free goods on the installation.
Calculating Residual Income for VA Loans
The VA residual income guidelines consider only significant monthly obligations. Lenders aren't going to hunt through your bank statements to determine how much you spend on small-ticket items.
Remember, your new mortgage payment will be a key component of the residual income calculation.
Here's an example calculation of residual income. Let’s assume the Veteran makes $5,000 a month and has the following expenses:
| Income Variable | Calculation |
|---|---|
| Gross monthly income | =$5,000 |
| Installment loans (ex: auto & student loans) | -$800 |
| Revolving loans (ex: credit cards) | -$100 |
| Child care/child support/alimony | -$300 |
| Full monthly mortgage payment | -$1,200 |
| Estimated utility costs | -$280 |
| Estimated residual income | =$2,200 |
VA lenders will multiply the home's square footage by 0.14% to estimate monthly utility costs. In our example, the $280 comes from the estimating utilities for a 2,000-square-foot home (2,000 x 0.14 = $280).
Lenders can pull most of these monthly expenses directly from your credit report. They may inquire about others in order to obtain the best estimate possible.
Residual Income and DTI Ratio
Residual income and debt-to-income ratio are interconnected financial guidelines for VA lenders. VA encourages lenders to put more weight on residual income than DTI ratio, and prospective borrowers with higher debt ratios will typically need to meet a higher standard for residual income.
At Veterans United, all borrowers with a DTI ratio above 41% must have enough residual income to exceed their guideline by 20%.
For example, a family of four in the Midwest would typically need $1,003 in residual income. But if their DTI ratio is higher than 41%, they’ll need at least $1,204 in residual income each month.
-
“The VA's residual income guideline ensures you can still support yourself and your family each month after paying your mortgage, debts and taxes. Because of this safeguard, VA lenders can often approve a higher debt-to-income ratio than other loan programs. It's an extra layer of protection, designed to keep Veterans in a strong financial position.”
Will LewisAssociate Director of Production - NMLS #187652Will is an Associate Director of Production at Veterans United, bringing 16 years of mortgage lending experience and a deep passion for helping those who serve.
Offsetting Residual Income
Prospective VA buyers who have income streams within the household that aren’t being considered for loan qualification may be able to use that money to lighten their residual income guideline.
Lenders may be willing to remove family members from the residual calculations if a non-purchasing spouse or a working-age child has sufficient income to cover their monthly debts. This can include children who receive Social Security or disability income, child support and other forms of income, provided it’s likely to continue for at least three years.
It’s possible for a non-purchasing spouse’s income to offset any children living in the home for residual income purposes.
Here’s a general example of how this can work.
Let’s say our same Midwestern family of four is buying a $200,000 home. Normally, they would need at least $1,003 in residual income. But if the non-purchasing spouse has enough monthly income to cover their debts and the difference in residual income, lenders can treat this family of four as a family of three for residual income purposes.
In this example, the non-purchasing spouse would need at least $114 leftover each month after paying debts. That’s the difference between the residual requirement for a family of four ($1,003) and the requirement for a family of three ($889).
Guidelines and policies on residual income offsets can vary by lender. Veterans United does allow for residual offsets for eligible borrowers.
Why Does the VA Have a Residual Income Requirement?
The VA’s residual income guideline offers a powerful and realistic way to look at VA loan affordability and whether new homeowners have enough income to cover living expenses and stay current on their mortgage.
Residual income is one of the more significant reasons VA loans have such a low foreclosure rate, even though about 8 in 10 VA buyers purchase without a down payment.
The VA wants to know that Veterans have enough residual income to cover things like gas, food, clothing and other typical family needs. A mortgage payment can put a new strain on family finances. So borrowers looking to start the VA loan process will need a minimum amount of residual income depending on their loan amount, where they live and how many people live in the home.
What If I Fail to Meet VA Residual Income Guidelines?
Failing to meet the residual income standard isn’t supposed to trigger automatic rejection of a VA home loan application. But a clearly inadequate residual income can lead to a loan denial. The VA does not define “clearly inadequate,” which means approaches can vary by lender.
At Veterans United, we typically require borrowers to meet their residual income requirement, with rare exceptions.
Remember, a huge part of the residual income calculation is your new projected mortgage payment. If your residual income is on the margins, one way to adjust might be to set your sights a little lower in terms of your homebuying budget.
If you have questions about your residual income, speak with a Veterans United VA loan expert at 1-855-870-8845 or get started online.
How We Maintain Content Accuracy
Our mortgage experts continuously track industry trends, regulatory changes, and market conditions to keep our information accurate and relevant. We update our articles whenever new insights or updates become available to help you make informed homebuying and selling decisions.
Current Version
Feb 23, 2026
Written ByChris Birk
Reviewed ByTara Dometrorch
Minimal content updates and added expert insight about DTI and residual income. Article fact checked and reviewed by team lead underwriter Tara Dometrorch.
Jan 7, 2025
Written ByChris Birk
Reviewed ByTara Dometrorch
Fact checked and reviewed by team lead underwriter Tara Dometrorch.
Veterans United often cites authoritative third-party sources to provide context, verify claims, and ensure accuracy in our content. Our commitment to delivering clear, factual, and unbiased information guides every piece we publish. Learn more about our editorial standards and how we work to serve Veterans and military families with trust and transparency.
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