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VA loans, like other loan programs, require that you can afford the home you’re proposing to finance

Affordability according to a VA lender is a mix between your current monthly household income and your qualifying debt. Lenders use both to arrive at a debt ratio. What are some of the things VA lenders evaluate when reviewing your income?

Income Sources

VA lenders can use income from a variety of sources but each must meet a minimum set of requirements. The first requirement is that the income must be verified as full time and in VA lender world, full time means working at least 30 hours per week for your employer.

If you’re self-employed, qualified income will be taken from your most recent federal income tax returns. Self-employment income must have a minimum two year history with a sustained amount, with self-employment income showing a year over year increase the most desirable.

Part time income may be used but only if there is at least a two year history of part time work along with the VA lender determining the part time income has a likelihood of continuance. Most other income sources that can be used such as income from interest, dividends, disability, retirement or pension must pass a financial litmus test verifying the receipt of such income for the last two years with an expected continuance of at least another three years.

Are There Income Limitations for VA Loans?

No, the VA does not limit income for qualifying VA loan borrowers. Continue reading VA loans, like other loan programs, require that you can afford the home you’re proposing to finance