Richard's Real Estate Thoughts - Fairway Independent Mortgage Corporation NMLS #2289: VA Mortgage: Residual Income Requirements

VA Mortgage: Residual Income Requirements

VA loans have an income requirement in addition to the more common debt to income ratio, DTI. VA’s Residual Income can affect a veteran’s loan approval, especially at the lower income levels.

VA Residual Income is based on family size and region and loan size:

 

Table of Residual Incomes by Region

For loan amounts of $79,999 and below

Family Size

Northeast

Midwest

South

West

1

$390

$382

$382

$425

2

$654

$641

$641

$713

3

$788

$772

$772

$859

4

$888

$868

$868

$967

5

$921

$902

$902

   $1,004

Over 5 -Add $75 for each additional member up to a family of seven

 

 

Table of Residual Incomes by Region

For loan amounts of $80,000 and above. 

Family Size

Northeast

Midwest

South

West

1

$450

$441

$441

$491

2

$755

$738

$738

$823

3

$909

$889

$889

$990

4

   $1,025

   $1,003

   $1,003

   $1,117

5

$1062

   $1,039

   $1,039

   $1,158

Over 5 - Add $80 for each additional member up to a family of seven

 

These Residual Income requirements must be met to obtain VA financing. The residual income is factored by subtracting certain deductions from the gross monthly income. The first step is to determine the correct monthly gross income, which can be difficult for commissioned or for self-employed workers.

 

The deductions that must be subtracted are:

 

Federal income tax

State income tax

 

Monthly FICA

(Soc Sec and Medicare)

 

Monthly obligations:

 

New house payment

(including tax and insurance) Installment loans

 

Revolving accounts

 

Child support/Alimony

 

Child care costs

 

Other monthly obligations

 

 

 

Monthly home maintenance

($0.14 per square feet GLA)

 

 

 

Total deductions

 

 

For DTI ratios over 41%, veterans must exceed the Residual Income requirements by 20%. VA Residual Income should be calculated early in the loan process. Failure to check Residual Income requirements early can jeopardize you home purchase VA loan approval.


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Richard Byron Smith
Mortgage Loan Officer
NMLS# 184479 TN# 104002 Georgia Residential Mortgage Licensee, GA#28928
Conventional, FHA, FHA 203k, HUD $100 down purchases, VA,
Rural Development (USDA), THDA and Jumbo Loans

Cell phone: 423-280-0345 Email:  Richard.Smith@FairwayMC.com
Branch Contact: Fairway Independent Mortgage Corporation,
2115 Stein Dr, Suite 215, Chattanooga, TN  37421
Office Phone: 423-280-0345  Office Email: richard.smith@fairwaymc.com

Mortgage Loan Officer helping home buyers in Tennessee and Georgia for over 20 years.

Fairway Independent Morgage Corporation
NMLS #2289
Chattanooga, TN

Equal Housing LenderNMLS

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This blog represents the opinions of Richard Smith. The posts and comments written on the blog do not represent the opinions or positions of Fairway Independent Mortgage Corporation.

 Copyright ©2018 Fairway Independent Mortgage Corporation. NMLS#2289. 4750 S. Biltmore Lane, Madison, WI 53718, 1-877-699-0353. Georgia Residential Mortgage Licensee #28928. Fairway is not affiliated with any government agencies. These materials are not from VA, HUD or FHA, and were not approved by VA, HUD or FHA, or any other government agency. All rights reserved. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply.

 

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Comment balloon 0 commentsRichard Byron Smith, NMLS #184479 • October 10 2016 11:09AM

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