VA Residual Income Calculator
The VA residual income calculator can help you estimate your net income after subtracting monthly expenses. Qualifying for a VA loan means you have to meet all the qualifications set forth in the underwriting guidelines, including a residual income requirement.
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Your residual income is the amount of money you have left after you’ve paid all your financial obligations and living expenses each month. Your net income must exceed VA residual area income charts to get a VA loan.
VA Residual Income Calculator
VA residual income charts: how much do you need?
The Veterans Administration sets residual income requirements based on the amount of the loan, your family size, and your location.
Residual Incomes by Region for Loan Amounts of $79,999 and Below
The table below outlines the required residual incomes for VA loans up to $79,999 across different regions and family sizes. These figures ensure that veterans have sufficient income remaining after meeting their monthly obligations.
| Family Size | Northeast ($) | Midwest ($) | South ($) | West ($) |
|---|---|---|---|---|
| 1 | $390 | $382 | $382 | $425 |
| 2 | $654 | $641 | $641 | $713 |
| 3 | $788 | $772 | $772 | $859 |
| 4 | $888 | $869 | $868 | $967 |
| 5 | $921 | $902 | $902 | $1,004 |
| Over 5 | Add $75 for each additional member up to a family of seven. | |||
Residual Incomes by Region for Loan Amounts of $80,000 and Above
The table below outlines the required residual incomes for VA loans of $80,000 and above across different regions and family sizes. These figures ensure that veterans have sufficient income remaining after meeting their monthly obligations.
| Family Size | Northeast ($) | 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 | $1,177 |
| 5 | $1,062 | $1,039 | $1,039 | $1,158 |
| Over 5 | Add $80 for each additional member up to a family of seven. | |||
VA Residual Income Regions Definitions
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, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia
West
Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming
What to do if you can't meet VA residual income requirements
✅ Reduce your expenses. This might mean cutting out some discretionary spending or even selling an item, like a vehicle, to reduce your monthly expenses.
✅ Increase your income. Even if you do this, the income must have enough history, consistency, and other qualifications according to the VA underwriting standards.
✅ Consider an FHA loan. FHA loans are backed by the Federal Housing Administration and don’t have a residual income requirement. Unlike a VA loan, you do have to put down 3.5% and pay mortgage insurance. The cost of homeownership could be higher if you go this route, but you can always refinance out of this loan and into a VA loan once you meet all of the qualifications for a VA loan.
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How is VA residual income calculated?
To find your residual income, subtract all of your debt, other financial obligations, and living expenses from your gross income (the amount of money you make before taxes).
For instance, if you earn $5,000 per month and have $4,000 in monthly expenses, your residual income will be $1,000. The amount of residual income you need will depend on your family size and the area where you’re buying a home.
Debt-to-income ratio for VA loans
If your debt-to-income ratio is over 41%, your residual income must exceed the area residual income by at least 20%.
DTI requirements for VA loans are around 41%, but in some circumstances may be as high as 60%. This higher DTI is acceptable for borrowers with compensating factors such as a higher residual income or substantial savings.
How to calculate your DTI: Divide your monthly expenses by your monthly income. With the example above, if $1,400 of your $4,000 in monthly expenses is debt, your DTI would be 28% ($1,400 divided by $5,000).
Contact Us
5868 Baker Road
Minnetonka, MN 55345
Travis Egan, VA Mortgage Vet
NMLS # 655284
1267 Eagles View Dr
Clarksville, TN 37040
(931) 208-6280
WE DON'T SLEEP UNTIL
THE MISSION IS COMPLETE
Edge Home Finance
NMLS# 891464
5868 Baker Road
Minnetonka, MN 55345
(763) 219-8484
Edge Home Finance is an Equal Housing Lender. We fully comply with the Equal Credit Opportunity Act (ECOA) and all other Federal regulations. All applicants applying for credit from Edge Home Finance will never be discouraged on the basis of race, color, religion, national origin, sex, military status, marital status, age, or because you get public assistance. All information we request is voluntary, and will be kept confidential. For more information on the ECOA, please visit:
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© Copyright 2024 | Edge Home Finance | All rights reserved.