VA Loans and Residual Income

VA Loans may be approved through an AUS or through manual underwriting. VA Loans, excepting streamlines, unlike conforming loans or FHA loans have not only DTI requirements but also residual income requirements for residual monthly income based on location and family size. The basic formula for residual income is:

Gross Income – Total Monthly Debt (including utilities, etc) = Residual Income

The only time that residual income is not calculated is in the case of an IRRRL/Streamline refinance.