Income remaining after all major monthly obligations — the VA's primary qualification test alongside DTI.
Residual income is the money a borrower has left over each month after paying all major obligations — housing costs, debts, taxes, and estimated living expenses. It is the centerpiece of VA loan underwriting: rather than relying on debt-to-income ratios alone, the VA requires borrowers to meet minimum residual income thresholds that vary by region and family size. This approach often allows qualified service members to be approved where a DTI-only analysis would decline them.
Also known as