Residual income is the amount of net income remaining (after deduction of debts and obligations and monthly shelter expenses) to cover family living expenses such as food, health care, clothing, and gasoline.
The numbers are based on data supplied in the Consumer Expenditures Survey (CES) published by the Department of Labor’s Bureau of Labor Statistics. They vary according to loan size, family size, and region of the country.
Count all members of the household (without regard to the nature of the relationship) when determining “family size,” including:
Exception:The lender may omit any individuals from “family size” who are fully supported from a source of verified income which, for whatever reason, is not included in effective income in the loan analysis. For example:
Reduce the residual income figure (from the following tables) by a minimum of five percent if:
Use five percent unless the VA office of jurisdiction has established a higher percentage, in which case, apply the specified percentage for that jurisdiction.
A key to the geographic regions is listed in the following tables.
| 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 | $1,062 | $1,039 | $1,039 | $1,158 |
| over 5 | Add $80 for each additional member up to a family of seven. | |||
| Key to Geographic Regions Used in the Preceding Tables | ||||
|---|---|---|---|---|
| Northeast | Connecticut Maine Massachusetts |
New Hampshire New Jersey New York |
Pennsylvania Rhode Island Vermont |
|
| Midwest | Illinois Indiana Iowa Kansas |
Michigan Minnesota Missouri Nebraska |
North Dakota Ohio South Dakota Wisconsin |
|
| South | Alabama Arkansas Delaware District of Columbia Florida Georgia |
Kentucky Louisiana Maryland Mississippi North Carolina Oklahoma |
Puerto Rico South Carolina Tennessee Texas Virginia West Virginia |
|
| West | Alaska Arizona California Colorado |
Hawaii Idaho Montana Nevada |
New Mexico Oregon Utah Washington Wyoming |
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