Reviewed by Jeff Shin, NMLS #1041652. Updated .
Also called: residual income.
How residual income is figured
The VA’s underwriting standards (38 CFR 36.4340) start with gross monthly income. From it, the lender subtracts income taxes and Social Security, the proposed house payment with taxes and insurance, any HOA or condo dues, an estimate for maintenance and utilities, and your other monthly debts. What remains is residual income.
The VA guideline amounts
The VA publishes minimums in a table that changes with three things: the loan amount (below or above $80,000), the number of people in the household, and the region (Northeast, Midwest, South, or West). Everyone living in the home counts toward family size, even someone not on the loan.
How it works with DTI
The VA’s benchmark debt-to-income ratio is 41%. A file above 41% can still be approved with written justification. If residual income beats the guideline by at least 20%, that extra justification is not required. That is why residual income is often the real constraint in a VA file. See residual income checks before an offer.
Related terms
Related on BankPricer
Sources
Definitions on this page are summarized from the agencies that set the rules. Lenders can add stricter requirements. Checked October 7, 2026.
Not sure which of these applies to you?
That is usually the actual question. Send the situation rather than the product name — purchase or refinance, primary or investment, price range, and timeline — and you get the structures that fit, with what each one costs.