Residual Income
Direct definition
The net monthly income remaining after all debts, taxes, and typical living expenses — used by VA underwriting.
Written by the Vabasso Mortgage Editorial Team · Reviewed against agency and federal sources · Read our editorial policy for how we research and review mortgage content
Plain-English explanation
The VA sets minimum residual income requirements by region and household size. It's an additional test alongside DTI.
Why it matters
Residual income can allow VA borrowers to qualify with higher DTI than other programs would permit.
Where you may see it
- VA underwriting worksheet
- Loan application
- Underwriting conditions
A real-world example
A family of four in the West must show a residual income above the VA's regional table minimum to qualify.
Educational and illustrative only
A common misunderstanding
Residual income isn't the same calculation as DTI — it looks at actual dollars left over rather than a ratio of debts to income.
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This glossary provides general educational information. Mortgage terminology, qualification methods, forms, timelines, fees, program rules, and legal meanings may vary by lender, investor, loan program, property, occupancy, state, and transaction. Definitions do not represent loan approval, legal advice, tax advice, or a commitment to lend.
- Author
- Vabasso Mortgage Editorial Team
- Reviewed by
- Vabasso Mortgage Licensed Advisory Team
- Last reviewed
- July 30, 2026