VA Residual Income Calculator (2022 Data)

Written by Aja McClanahanSeptember 14th, 20223 minute read

Jump to section: VA residual income calculator | How is VA residual income calculated? | VA residual income charts | FAQ

Our 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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VA residual income calculator

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 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.

For VA 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
Data from Govinfo.gov*For families with more than five members, add $75 for each additional member up to a family of seven. “Family” includes all members of the household.

For VA 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
Data from Govinfo.gov*For families with more than five members, add $80 for each additional member up to a family of seven. “Family” includes all members of the household.

What to do if you can't meet VA residual income requirements

If you don’t meet the residual income requirements for a VA loan, you’ve got a few options.

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).

VA residual income calculator FAQ

Residual income is a calculation that estimates the net monthly income after subtracting out the federal, state, and local taxes, (proposed) mortgage payments, maintenance, utilities, and all other monthly obligations such as student loans, car payments, credit cards, etc. from the household paycheck(s).

To calculate VA residual income, subtract all of your monthly household expenses, including your proposed income and federal, state, and local taxes from your gross monthly income.

This depends on your family size and the area where you will be buying a home. You can get exact residual income requirements from the Code of Federal Regulations website.

Although residual income is an important factor in your loan qualification, not meeting the VA requirements for residual income will not automatically disqualify you for a VA loan. If you’ve got other compensating factors like a lower DTI, more money to put down, large cash reserves, or additional income, you could still qualify for a VA loan.