VA Residual Income Explained for Borrowers in PA and FL

Understand how VA residual income works, what the guidelines are, and how it affects your VA loan approval in Pennsylvania and Florida.

If you are a veteran or active-duty service member looking to buy a home with a VA loan, you have probably heard about debt-to-income ratio (DTI). What most people do not hear about right away is something just as important:

VA residual income

Residual income is one of the key ways the VA makes sure your new mortgage payment still leaves enough room in your budget for real life. Here we will walk through what VA residual income is, how it is calculated, the guideline numbers for Pennsylvania and Florida, and how you can improve your residual income before you apply.

What is VA residual income?

The VA defines residual income as the net income left over each month after you subtract taxes, major debts, and housing costs. In other words, it is what is left to cover food, gas, clothes, medical costs, childcare, and everything else your family needs to live.

For VA loans, residual income is not just a nice-to-know number. It is built right into VA underwriting. If your residual income is too low for your family size and region, an approval becomes much harder.

How residual income fits with DTI

Most mortgage programs rely mainly on DTI. That is your total monthly debt payments divided by your gross monthly income.

VA loans look at DTI too, but they add another layer of protection for veterans by checking residual income. Two borrowers could have the same DTI, but very different residual income because of:

• Different tax situations
• Different housing costs (taxes, insurance, HOA, utilities)
• Different family sizes

Residual income helps the VA see if your budget will still work after the mortgage is in place, not just on paper but in real life.

How VA residual income is calculated

Here is the basic idea of the VA residual income calculation. Exact calculations are done on VA Form 26-6393, the Loan Analysis form.

1. Start with effective monthly income

• Base pay, overtime, bonuses that qualify
• Tax-free income such as certain disability benefits or BAH if it is included

2. Subtract estimated monthly federal, state, Social Security and Medicare taxes

3. Subtract all monthly debt obligations, including:

• Car loans and leases
• Student loans
• Credit card minimums
• Personal loans
• Child support or alimony payments

4. Subtract proposed housing expenses, including:

• Principal and interest on the new VA loan
• Property taxes
• Homeowners insurance
• HOA or condo dues

5. Subtract maintenance and utilities

• The VA uses an estimate of $0.14 per square foot of the property to account for utilities and basic maintenance.

Whatever is left after all of those items are subtracted is your residual income.

VA residual income guidelines for Pennsylvania and Florida

VA residual income guidelines depend on three things:

• Your region of the country
• Your family size
• Your loan amount – below $80,000 or $80,000 and above

Pennsylvania is in the Northeast region. Florida is in the South region.

Below are sample guideline amounts for loan amounts of $80,000 and above, which is where most VA home purchases fall today.

Northeast region (includes Pennsylvania) – sample residual income guidelines

For VA loans at or above $80,000, the VA guideline residual income for the Northeast region is approximately:

• Family of 1: about $450 per month
• Family of 2: about $755 per month
• Family of 3: about $909 per month
• Family of 4: about $1,025 per month
• Family of 5: about $1,062 per month

For family sizes over 5, the guideline adds about $80 per person, up to a family of 7.

South region (includes Florida) – sample residual income guidelines

For the South region, guideline residual income for loans at or above $80,000 is very similar:

• Family of 1: about $441 per month
• Family of 2: about $738 per month
• Family of 3: about $889 per month
• Family of 4: about $1,003 per month
• Family of 5: about $1,039 per month

Again, add about $80 per person for family sizes above 5, up to 7.

These numbers can look small at first glance, but remember that they are calculated after taxes, debts, housing, and utilities have already been taken out. Hitting or exceeding the guideline is a strong sign that the new mortgage will fit your budget.

A simple example

Here is a very simplified example just to show the concept.

Imagine a veteran buying in Bucks County or Orlando with:

• Net take-home income plus qualifying tax-free income: $6,000 per month
• Proposed VA housing costs (principal and interest, taxes, insurance, HOA): $2,200 per month
• Other debts (car, cards, student loans, support): $700 per month
• Home is about 2,000 square feet so utilities are estimated at $280 per month (2,000 × $0.14)

Residual income would be:

6,000 − 2,200 − 700 − 280 = $2,820

If this borrower is a family of 4 in Pennsylvania or Florida, the guideline residual income is around $1,025 to $1,003. So in this example, they are well above the guideline, which is a positive factor in underwriting.

Special rules that can help

The VA underwriting guide allows a few important adjustments:

• Family size flexibility – Certain individuals can be excluded from the “family size” count if they are fully supported by verified income that is not part of the effective income on the loan. For example, a spouse with separate income that covers their living expenses, or a child supported entirely by foster care payments or support that is documented.
• 5 percent reduction in some cases – Residual income guidelines may be reduced by 5 percent if the borrower or spouse is active-duty or retired military and will continue to have access to nearby military facilities that reduce living expenses. The VA regional office can sometimes require a higher percentage, so this is case by case.

These details are not always explained clearly up front, but they can make a difference if you are very close to the guideline.

How to improve your VA residual income

If you are a little short of the guideline amount for your family and region, there are several ways to improve your residual income before or during the pre-approval process:

1. Pay down or consolidate small monthly debts
   Lowering your car payment or paying off a few small credit lines can increase residual income quickly.
2. Adjust the home price or down payment
   A slightly lower purchase price or a bigger down payment can reduce your principal and interest payment, which boosts residual income.
3. Shop homeowners insurance and HOA options
   Different properties have different tax, insurance, and HOA costs. Sometimes choosing a similar home with lower monthly costs can put you over the guideline.
4. Add a co-borrower with income
   Adding a spouse or partner who has stable income and manageable debts may help meet residual income requirements.
5. Correct errors in your debt list
   Make sure every debt on your application is accurate. Old paid-off accounts should not be counted against you.

The key idea: small monthly changes can move the needle. You do not always need a huge jump in income to get from “just under” to “comfortably above” the guideline.

Use our VA Residual Income Calculator

On our site, we built a VA residual income calculator tailored for:

• Pennsylvania properties which are in the Northeast region
• Florida properties which are in the South region

The calculator lets you plug in:

• Family size and state
• Net income and any tax-free income
• Proposed housing costs and square footage
• Other monthly debts

It then estimates your residual income and compares it to the VA guideline for your region and family size. This is not a formal approval, but it is a very helpful planning tool.

Work with a mortgage broker who understands VA guidelines

VA loans are one of the most powerful benefits available to veterans and service members. The combination of no required down payment (for qualified borrowers), no monthly mortgage insurance, flexible credit, and competitive rates can make homeownership much more accessible.

At the same time, the guidelines are different from conventional lending. Residual income is a perfect example. If your lender or loan officer does not live in this world every day, it is easy for things to get missed or misinterpreted.

At Innovative Mortgage Brokers, we help VA buyers in Pennsylvania and Florida understand:

• How much home they can comfortably afford
• How residual income and DTI work together
• Which loan structures make the most sense for their family and long-term plans

If you are thinking about using a VA loan to buy or refinance in PA or FL, start by running your numbers through our calculator, then reach out. We will walk you through your options in plain language and help you build a game plan that respects both your service and your budget.

Quick VA residual income FAQs

Is VA residual income the same as DTI?
No. DTI compares monthly debt payments to gross income. Residual income looks at net income after taxes and subtracts debts, housing costs, and an estimate for utilities and maintenance. Both are used for VA underwriting, but they measure different things.

What happens if my residual income is slightly below the VA guideline?
Being a little short does not automatically mean denial, but it does raise red flags. The lender and VA may look for strong compensating factors such as high credit scores, significant savings, or very low DTI. It is much better to plan ahead and adjust your scenario so you meet or exceed the guideline.

Do all VA lenders use the same residual income numbers?
The baseline numbers come from the VA handbook and are the same across lenders. Some lenders may add their own overlays or want you to be comfortably above the bare minimum, especially for higher loan amounts or riskier files.

Can I still qualify if I have a large family?
Yes, but the guideline amounts do increase with family size. Planning, debt management, and realistic price points become even more important. This is where a detailed review and strategy session can be very helpful.