VA residual income calculator

What is residual income on a VA loan?

Veteran with familyResidual income is a calculation that estimates the net monthly income after subtracting out the federal, state, local taxes, (proposed) mortgage payment, and all other monthly obligations such as student loans, car payments, credit cards, etc. from the household paycheck(s). Also included in the calculation is a maintenance & utilities expense. The net income must exceed VA residual area income charts.
The residual income calculation attempts to discern whether the veteran borrower(s) has sufficient income for gas, groceries and other typical household necessities.

The residual calculation is actually more important to the VA than the customary debt to income calculation.

"VA’s debt-to-income ratio is a ratio of total monthly debt payments (housing expense, installment debts, and so on) to gross monthly income. It is a guide and, as an underwriting factor, it is secondary to the residual income". Source: VA Pamphlet 26-7, Revised Chapter 4: Credit Underwriting

If the debt-to-income ratio is greater than 41%, the borrower's residual income must exceed the area residual income by at least 20%.

The VA loan calculator will estimate the debt to income ratio and residual income. The monthly income calculator will convert year to date, biweekly, semi-monthly and other income calculations into monthly income. 


Pre-qualification Worksheet | Monthly Income Calculator |

  VA Residual Income Calculator      
  1. Gross Monthly Income  
  2. Monthly Housing Expense (PITI)    
  a. Principal and Interest Payment    
  b. Property Taxes    
  c. Homeowners Insurance    
  d, Homeowners Association Dues    
  Total =  
  3. Monthly Debts and Obligations    
  a. Car(s)    
  b. Revolving Charge Accounts    
  c. Installment Loans    
  d. Child Care Expenses    
  e. Other    
  Total =  
  4. Monthly Maintenance & Utilities    
  a. Total Square Footage    
  b. Square Footage X 14 cents per sq. ft.   $ 0.14  
  Total =  
  5. Monthly Taxes    
  a. Federal Income Tax (from pay stubs)    
  b. State Income Tax (from pay stubs)    
  c. Social Security (salaried or SE'd)    
  Total =  
  6. Residual Income    
  a. Amount Required (Per Residual Chart)    
  b. Actual (1) minus (2), (3), (4) & (5)    
  7. Debt-to-Income Ratio (VA guideline 41%)    
  (2) + (3) divided by (1)    

VA loan residual income guidelines

► Who is counted in family size?

According to the Veterans Administration all family members (without regard of the relationship) must be counted in determining “family size,” including: an the spouse of the applicant who is not joining in the title of the residence or on the mortgage note, and any other individual(s) who depend on the applicant for support. For example, children from a spouse’s previous marriage who are not the legal dependents of the applicant. Lenders are permitted to exclude any individuals from “family size” who are fully supported from a verified income source which, for any reason, is not included in the effective income in the loan analysis. For example:

child support that is regularly received, or sufficient foster care payments received for a child,
a spouse who has stable and reliable income sufficient to support his or her living expenses and is not obligated on the note

► Can you be denied a VA home loan?

Yes. The VA home loan is offered to eligible veterans who are gainfully employed, have a good credit history and score and meet all the normal mortgage guidelines.

► Can you do a 15 year VA loan?

Yes. Lenders offer 15 year loan terms for VA loans.