Quick answer for Kentucky
Kentucky is in the VA's South region. On a loan of $80,000 or more, a family of four needs at least
$1,003 a month left over after the house payment, taxes, utilities, and debts. If your debt-to-income
ratio is over 41%, you need 20% more than the chart (about $1,204 for a family of four).
VA Residual Income Chart 2026
These are the VA's minimum monthly residual income amounts by family size and region, from Chapter 4 of the VA Lenders Handbook (Pamphlet 26-7). They haven't changed for 2026.
Loan amounts of $80,000 and above
| Family size |
Northeast |
Midwest |
South (KY) |
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 family member |
Loan amounts of $79,999 and below
| Family size |
Northeast |
Midwest |
South (KY) |
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 family member |
Regions: 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.
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.
West = Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming.
How to Calculate VA Residual Income
Start with the gross monthly income of the veteran (and spouse, if they're on the loan), then subtract:
- Federal and state income taxes, Social Security, and Medicare
- The new house payment (principal, interest, taxes, insurance, and any HOA dues)
- Maintenance and utilities: lenders use $0.14 per square foot of living area
- Monthly debt payments: car loans, student loans, credit cards, and other installment debt
- Child care, child support, and alimony
What's left is your residual income. Compare it to the chart for your family size and loan amount.
Example: Louisville family of four, $250,000 VA loan
| Gross monthly income | $6,000 |
| Taxes (federal, state, Social Security, Medicare) | − $1,050 |
| New house payment (PITI) | − $1,750 |
| Maintenance & utilities (1,500 sq ft × $0.14) | − $210 |
| Car payment + credit cards | − $490 |
| Residual income | $2,500 |
The South-region minimum for a family of four is $1,003, so this family passes easily. Their DTI is ($1,750 + $490) ÷ $6,000 = 37%, under 41%, so the 20% rule doesn't apply.
VA Residual Income Calculator (Kentucky)
Enter monthly amounts. This is an estimate for planning only; your lender's underwriting decides the final numbers.
Rules That Change the Number
The 41% DTI rule. If your debt-to-income ratio is above 41%, the VA wants your residual income at least 20% above the chart. A Kentucky family of four would need about $1,204 instead of $1,003. Strong residual income is often what gets a VA loan approved with a high DTI.
Who counts in family size. Everyone in the household who depends on your income counts, even if they aren't on the loan. That includes a non-borrowing spouse and a spouse's children from a prior marriage. You can leave out anyone fully supported by verified income that isn't being counted on the loan, such as a spouse with their own steady income or a child supported by regular child support or foster care payments.
Military discount. If you or your spouse is active duty or retired military and will keep using a nearby base (commissary, medical care, and so on), the lender can reduce the required figure by at least 5%. In Kentucky that usually means Fort Knox or Fort Campbell.
It's a guide, not a hard cutoff. The VA tells lenders that residual income shouldn't automatically trigger approval or denial. If you're slightly short, strong credit, savings left after closing, or a history of handling a similar housing payment can carry the file. Falling far short is usually a decline on its own.
More VA guides: Kentucky VA loan requirements 2026 ·
VA closing costs & funding fee ·
Source: VA Lenders Handbook, Chapter 4.
VA Residual Income Questions
VA Residual Income FAQ — Answered by a Kentucky VA Lender
What is the VA residual income chart for 2026?
Kentucky is in the VA's South region. For loan amounts over $80,000, the minimum monthly residual income is:
| Family size | Loan over $80,000 | Loan under $80,000 |
|---|
| 1 | $441 | $382 |
| 2 | $738 | $641 |
| 3 | $889 | $772 |
| 4 | $1,003 | $868 |
| 5 | $1,039 | $902 |
Add $80 for each additional family member beyond five (for loans over $80,000). These VA figures apply to every Kentucky county, including Louisville, Lexington, and Northern Kentucky.
How do I calculate my VA residual income?
Start with the gross monthly income of the veteran and spouse, then subtract federal and state taxes, Social Security, the proposed new house payment (principal, interest, taxes, and insurance), estimated maintenance and utilities (most lenders use about 14 cents per square foot of the home), child care, alimony or child support, and monthly payments on installment loans and credit cards. Whatever is left over is your residual income.
Can I still get approved if my residual income is below the VA guideline?
Falling slightly short is not an automatic denial — the VA tells lenders that residual income should not automatically trigger approval or rejection. If you are close to the number, compensating factors like strong credit history, savings after closing, or a history of handling similar housing payments can carry the file. Falling far below the guideline, however, is usually a deal breaker on its own.
Who counts as family size for VA residual income?
Everyone in the household counts, whether or not they are on the loan — including a spouse who is not on the note and children from a spouse's prior marriage. The exception is anyone fully supported by verified income that is not being counted in the loan, such as a child receiving sufficient foster care payments or child support. Active-duty and retired service members near a military base may also have their required figure reduced by 5%.
What is the VA 20% residual income rule when DTI is over 41%?
If your debt-to-income ratio is above 41%, VA guidelines require your residual income to exceed the chart minimum by at least 20%. For example, a Kentucky family of four with a DTI over 41% would need roughly $1,204 in monthly residual income instead of $1,003. This is the most common way strong residual income saves a VA loan that would fail on DTI alone.
How is residual income different from debt-to-income ratio?
DTI is a percentage — your monthly debts divided by your gross income. Residual income is a dollar amount — the actual cash left over each month after taxes, the new house payment, utilities, and debts are paid. The VA checks both because a family can have an acceptable DTI on paper and still not have enough real money left to live on. Residual income is the VA's guard against becoming house poor.
Want me to run your residual income numbers before you house-shop? Call or text me at 502-905-3708, or start your free pre-qualification — I lend on VA loans across all 120 Kentucky counties.
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