Residual Income (VA)

Residual income is the VA loan program’s signature affordability check. Rather than leaning on a single debt-to-income cap, the VA looks at how many real dollars are left after the housing payment, other debts, taxes, and an estimate for home maintenance and utilities.

The VA treats 41 percent as a DTI guideline, not a hard ceiling, and pairs it with regional residual-income tables that scale by household size and the region of the country. When a borrower’s DTI runs above 41 percent, lenders commonly look for residual income roughly 20 percent above the table figure as a cushion. The official tables come from VA Pamphlet 26-7, Chapter 4, and the dollar amounts are widely reproduced by major VA lenders.

The specific dollar figures are commonly published values that vary by household size, region, loan amount, and lender, and they change over time, so check the current table for your case. The point of the method is simple: it asks whether the budget actually breathes after the mortgage, not just whether a ratio fits.