For VA residual income, family size normally includes the borrower, a nonborrowing spouse, and other household members—even when only one person signs the mortgage. A lender may omit someone fully supported by verified income that stays outside the loan’s qualifying income. Being off the loan, by itself, does not qualify someone for that exception. VA’s household-count instructions explain the distinction.

Residual income is the money left each month for family living expenses after the lender subtracts applicable deductions, debts, obligations, and estimated shelter costs from qualifying income. The lender compares that balance with a guideline based on family size, property region, and loan amount.

Who belongs in the household count?

Start with everyone in the household, regardless of their relationship to the borrower. VA specifically includes a spouse who will not join in title or sign the note, along with other people who depend on the borrower for support. Examples include a dependent parent and children from a spouse’s previous marriage who are not the borrower’s legal dependents.

Tax returns do not define the entire household. The VA Lenders Handbook, Chapter 4, Topic 9, says a dependent claimed on federal tax returns must be considered in the count. Someone’s absence from a tax return does not establish an exclusion.

When can a household member be omitted?

The exception requires full support from verified income outside the loan’s effective income—the income the lender accepts for qualification. VA gives these examples:

• A spouse outside the title and note whose stable, reliable income covers their living expenses.
• A child receiving sufficient, regular child support or foster-care payments.
• A parent with sufficient, stable, reliable nontaxable income.

Under VA’s exclusion rule, the lender must determine whether the facts support an exclusion. The same income cannot both increase qualifying income and justify removing the person it supports. A partial contribution toward groceries does not establish full support.

Excluding a spouse from family size also does not automatically remove that spouse’s debts. Spousal-debt treatment requires a separate analysis, including community-property rules, under Chapter 4, Topic 5.

Which documents support an exclusion?

Ask your loan officer which records to provide voluntarily for an exclusion review. This checklist suggests records to discuss; it is not a universal VA document package.

The records should help the underwriter establish whose expenses the income covers, why it is sufficient, and why it remains outside qualifying income. A support order establishes an obligation; receipt records help show whether payments actually arrive. VA’s income-verification guidance addresses employment, benefits, and support-payment reliability. The precise documentation depends on the income source and underwriting method.

Keep the household explanation with your other home-purchase preparation records.

How region and loan amount change the guideline

VA uses separate tables for loans of $79,999 or less and $80,000 or more. Use the property’s location and VA’s regional definitions: Texas is South, California is West, New York is Northeast, and Illinois is Midwest.

VA’s Chapter 4, updated August 26, 2026, lists these base monthly guidelines for loans of $80,000 or more:

For each person above five, add $80, stopping at a family size of seven. The smaller-loan table uses different amounts and adds $75 per additional person, also stopping at seven. Its four-person South guideline, for example, is $868. The official tables and regional definitions in 38 CFR 36.4340(e) provide underwriting guidelines, not an automatic approval decision.

Ask whether a military-facility adjustment applies before treating the base figure as your final guideline. VA entitlement is a separate eligibility question; the residual-income table measures household repayment capacity.

Example: one borrower in a four-person household

Suppose a buyer seeks a $300,000 VA loan in Texas and lives with a nonborrowing spouse and two children. Assume the lender calculates $950 in monthly residual income after all required deductions, with no military adjustment.

With four people counted, the South guideline is $1,003, leaving a $53 shortfall. If the spouse has verified, stable income sufficient for their own living expenses, that income stays outside qualifying income, and the lender accepts the exclusion, the count becomes three. The guideline falls to $889, leaving a $61 margin.

The spouse’s earnings have not been added to the $950; only the comparison guideline changed. The children remain counted unless a separate supported exception applies. This hypothetical calculation uses VA’s table and household-support rule. It does not predict approval.

Can a satisfactory DTI replace residual-income analysis?

No. Debt-to-income ratio, or DTI, compares specified monthly housing payments and other obligations with gross monthly income. Residual income measures the dollars left for living expenses after deductions and costs, including estimated maintenance and utilities. Both matter when comparing mortgage program requirements.

VA ordinarily expects both standards to be met. A DTI of 41% or less does not waive residual-income analysis. Approval despite a residual shortfall requires documented justification addressing compensating factors, signed by the underwriter’s supervisor, or submission to VA for prior approval.

When DTI exceeds 41% and residual income exceeds the guideline by at least 20%, 38 CFR 36.4340(c)–(f) removes the specified second-level review and justification requirement. It does not guarantee approval. Tax-free income may also be adjusted upward for DTI analysis, but residual income uses actual income.

Use the September 2025 VA Form 26-6393

VA’s form catalogue identifies the September 2025 revision. The applicable Loan Analysis PDF says it supersedes August 2022 and labels the relevant fields:

• Item 43: Balance Available for Family Support, with a guideline box.
• Item 44: Ratio.
• Item 53: Remarks.

Older handbook instructions still refer to item 47 as “Remarks.” On the September 2025 form, item 47 is “Borrower CAIVRS,” so use the current form’s labels when documenting the analysis.

Before relying on a qualification estimate, ask your loan officer to confirm the household count, the basis for any exclusions, the applicable guideline, and the calculated residual balance together.