The VA home loan is the strongest purchase program in the country for people who've served. You can buy with $0 down, there's no monthly mortgage insurance, and the approval turns on a test most buyers have never heard of: residual income. Get that test right and a debt-to-income ratio well over the Conventional limit can still close on VA. Florida falls in VA's South region, and its residual income figures are in the table further down.
What VA requires
| Requirement | The rule |
|---|---|
| Eligibility | Certificate of Eligibility (COE) based on your service |
| Down payment | $0 |
| Credit score | No VA minimum (AAA goes down to 500) |
| Debt-to-income | 41% guideline, no hard cap |
| Residual income | Must meet the VA table for your region and family size |
| Mortgage insurance | None |
| Funding fee | 2.15% first use with under 5% down, financed |
| Loan limit | None with full entitlement |
| Property | Primary residence, 1 to 4 units |
| Seller concessions | Up to 4%, plus normal closing costs |
Who's eligible
Your eligibility shows on a Certificate of Eligibility, which your lender can usually pull straight from VA's system in minutes. The service minimums:
- Active duty now: 90 continuous days.
- Veterans who served on or after August 2, 1990: 24 continuous months, or the full period you were called up for (at least 90 days).
- National Guard and Reserve: six creditable years, or 90 days of qualifying active duty.
- Surviving spouses: eligible in many cases, including those receiving Dependency and Indemnity Compensation (DIC).
A discharge for a service-connected disability can qualify you with less time. Earlier service eras have their own minimums, and VA's eligibility page lists every one.
Credit score and past credit events
VA doesn't publish a minimum credit score. Each lender sets its own floor, and AAA Capital Funding approves VA loans down to a 500 score. What VA cares about is your pattern of paying, especially over the last 12 months.
On bankruptcy, VA's rule is practical. A Chapter 7 discharge more than two years old generally isn't held against you. Between one and two years, it can work when the bankruptcy came from circumstances beyond your control and you've reestablished credit since. Inside 12 months, it generally won't. During a Chapter 13 plan, you can buy once you've made 12 months of on-time plan payments and the trustee approves the new loan.
VA's regulation says a past foreclosure doesn't disqualify you by itself. Most lenders look for two years since the foreclosure, and a foreclosure on a prior VA loan can tie up part of your entitlement until VA's loss is repaid.
Debt-to-income: 41% is a guideline
Debt-to-income (DTI) is your monthly debts divided by your gross monthly income. On VA, the debt side is PITI (principal, interest, property taxes and homeowners insurance) on the new home, plus HOA dues and your other long-term debts.
VA's standard is 41% or less. Above 41%, the loan can still be approved. If your residual income beats the VA table by at least 20%, the extra review isn't required. If it doesn't, the underwriter has to write a justification explaining the compensating factors. VA buyers with strong residual income regularly close at DTIs well above what other programs allow. Automated underwriting (AUS) decides most VA loans first, and the residual income test runs alongside it.
Residual income: the test that decides VA
Residual income is the money left each month after the bills that come with owning the home. VA wants a family to have enough left for food, clothing, gas and everything else. The lender starts with your gross monthly income and subtracts:
- Federal income tax, state income tax (Florida has none) and Social Security and Medicare
- The full new house payment: PITI plus any HOA dues
- Maintenance and utilities, figured at $0.14 per square foot of living area
- Your monthly debts: car, credit cards, student loans and the rest
- Child care and other job-related costs
What's left is compared to the VA residual income table for your region, family size and loan amount. Family size means everyone in the household, including a spouse who isn't on the loan and every child living with you.
These are the South region minimums, which cover Florida:
| Family size | Loan of $79,999 or less | Loan of $80,000 or more |
|---|---|---|
| 1 | $382 | $441 |
| 2 | $641 | $738 |
| 3 | $772 | $889 |
| 4 | $868 | $1,003 |
| 5 | $902 | $1,039 |
| Each additional member (up to 7) | add $75 | add $80 |
Nearly every Florida purchase uses the right-hand column. A family of four needs $1,003 left over. Above a 41% DTI, the target becomes 120% of that figure, or $1,203.60.
One detail matters for anyone with tax-free income. VA lets the lender gross up non-taxable income, such as VA disability or SSI, for the DTI calculation (AAA uses 25%). Residual income uses only the actual dollars you receive.
A family of four buying in Florida
A veteran with a spouse and two kids earns $6,000 a month gross. Federal tax withheld is $200 a month, and Social Security and Medicare take 7.65%, or $459. Debts are a $450 car payment and $75 in credit card minimums, $525 in total. They're buying a $350,000 single-family home of 1,600 square feet with $0 down.
The 2.15% funding fee is $7,525, financed into the loan, so the loan is $357,525 at 5.75% on a 30-year fixed.
| Monthly item | Amount |
|---|---|
| Principal and interest | $2,086.42 |
| Property taxes (about 0.95% a year) | $277.08 |
| Homeowners insurance | $283.00 |
| PITI | $2,646.50 |
| Other debts | $525.00 |
| Total DTI ($3,171.50 ÷ $6,000) | 52.86% |
Now the residual income math:
| Amount | |
|---|---|
| Gross monthly income | $6,000.00 |
| Federal income tax | -$200.00 |
| Social Security and Medicare | -$459.00 |
| PITI | -$2,646.50 |
| Maintenance and utilities (1,600 × $0.14) | -$224.00 |
| Other debts | -$525.00 |
| Residual income | $1,945.50 |
The family needs $1,003, and with a DTI over 41% the bar is $1,203.60. They have $1,945.50, about 194% of the table figure. A 52.86% DTI would be over the line for Conventional. On VA, this family is in strong shape. Run your own scenario across every program on the affordability calculator.
To see the residual income test run on your actual paystubs and debts, call AAA Capital Funding at 888-601-8344 and we'll walk you through it.
The VA funding fee
VA charges a one-time funding fee instead of monthly mortgage insurance. On a purchase, it depends on your down payment and whether you've used the benefit before:
| Down payment | First use | After first use |
|---|---|---|
| Under 5% | 2.15% | 3.3% |
| 5% or more | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
The fee can be financed, which is how most buyers handle it. You don't pay the fee at all if you:
- Receive VA compensation for a service-connected disability
- Are eligible for that compensation but receive retirement or active-duty pay instead
- Are a surviving spouse receiving DIC
- Are on active duty and have received the Purple Heart
- Have a proposed or memorandum disability rating before closing on a pre-discharge claim
In the example above, an exempt veteran would borrow $350,000 instead of $357,525, and the principal and interest would drop to $2,042.50, about $44 a month less.
No mortgage insurance and no loan limit
There's no monthly mortgage insurance on VA at any down payment. On a $357,525 loan, Conventional PMI at a 620 score would run about $447 a month in QualRate's model, and VA charges nothing.
With full entitlement, VA has no loan limit. Your income, residual income and the appraisal set the ceiling. If part of your entitlement is still tied up in another VA loan, the remaining entitlement is based on your county's conforming limit (in most of the country, $832,750 for 2026). Lenders want your entitlement, a down payment or both to cover 25% of the loan. The loan limits page shows your county's figure.
Closing costs and seller help
On a purchase, the funding fee is the only cost you can roll into the loan. Everything else is paid at closing by you, the seller or both. The seller can pay all of your normal closing costs, and on top of that can give up to 4% of the home's value in concessions, such as paying your funding fee, prepaying your insurance or paying off a debt so your ratios work. With both in play, a VA buyer's check at closing is often small. Estimate yours on the cash to close calculator.
How VA counts student loans and other debts
VA counts any debt with 10 or more months of payments left. For student loans, VA's rule is specific:
- Deferred at least 12 months past closing: no payment counted, with written proof of the deferment.
- In repayment or starting within 12 months: the lender uses 5% of the balance divided by 12. On a $25,000 balance, that's $104.17 a month.
- Credit report shows a higher payment: the higher payment counts.
- Credit report shows a lower payment: the lower payment can be used with a statement from the servicer dated within 60 days of closing.
Medical collections don't count against you. Non-medical collections without a payment arrangement are counted at 5% of the balance divided by 12, so a $1,200 collection adds $5 a month. The student loan DTI calculator shows how each program treats your balances.
Property and occupancy
The home has to be your primary residence, and VA expects you to move in within a reasonable time after closing, generally 60 days. VA finances single-family homes and 2 to 4 unit properties where you live in one unit. On 2 to 4 units, lenders count part of the rent from the other units and expect six months of house payments in reserve. The home must pass a VA appraisal and meet VA's minimum property requirements, which cover safety, soundness and sanitation.
A spouse's income counts on VA, even when the spouse isn't a veteran. A parent or grandparent co-signing works on FHA and Conventional loans, so if the VA numbers come up short, that's the next place we'd look. The co-signer calculator shows what one adds.
Call AAA Capital Funding at 888-601-8344 to talk through your entitlement, residual income and the payment on the home you have in mind. We'll lay it out and you take it from there.