The VA Runs a Second Test After Debt-to-Income, and Pennsylvania Can Move It
Program and regulatory figures verified October 10, 2026. Details change; confirm your scenario with us.
Most VA content stops at debt-to-income. Residual income is the test that actually decides marginal files, and it is the one Pennsylvania's tax exemption moves.
What the test is
Alongside a debt-to-income ratio, the VA requires a residual income calculation: broadly, what is left of your qualifying income each month after the mortgage payment, other debts and certain living costs.
★ The thresholds depend on region and family size, and they rise with both.
★★ Why there are no numbers on this page
As a matter of policy, not availability. The official source is VA Pamphlet 26-7, Chapter 4 on KnowVA. We do not reproduce underwriting tables on a marketing page because thresholds change and a stale one is worse than none, and because a threshold tells you nothing without your household size, utilities, debts and tax withholding.
The figures live in VA Pamphlet 26-7, Chapter 04, and the current home for it is the VA's KnowVA portal. Two hosts, both of which answer 200 and neither of which serves an automated reader anything:
| Source | Status | What an automated reader gets |
|---|---|---|
benefits.va.gov/WARMS/pam26_7.asp | 200 | a JavaScript loader; no chapter links in the HTML |
★★ knowva.ebenefits.va.gov. Pamphlet 26-7 Chapter 04 | 200 | ★★ 77 characters: "Javascript is not enabled. Please enable Javascript to access this website." |
★★★ That second row is the clearest example we have of why a status code is not a citation. The URL is right, the document is right, the server says 200: and the content served to a crawler is one sentence telling it to enable JavaScript. We re-tested on 10 October 2026 under two AI crawler agents and a browser-agent fetch; all three got the gate.
★★ Plenty of sites publish a residual income table. Several of them agree with each other, which feels reassuring and is not evidence: the thresholds are updated by the VA, and a table copied from another blog carries no date. We have been caught by exactly that pattern before, so the rule here is the same as everywhere on this site — cite or omit.
★ We will quote your actual thresholds on your actual file, from the current handbook, when we price it. We are not going to put a number on a web page that a reader might budget against.
★★ The Pennsylvania connection, which is the point of this page
Residual income is computed after shelter expenses, and property tax is part of the shelter figure for a homeowner.
★★ So for a veteran whose Disabled Veterans' Real Estate Tax Exemption is approved, the property-tax component of that calculation goes to zero. Residual income improves directly, and by the full amount of the tax.
★★ That is a bigger deal than it sounds, because residual income is a dollar test, not a ratio. A ratio improvement helps proportionally; removing a fixed monthly cost helps absolutely. On a marginal file it can be the difference.
★ And it compounds with the funding-fee exemption and zero down, which is why we treat those three together. The stack · The exemption criteria.
★★ Timing is the practical issue
An approved exemption and a pending one are different files.
★★ If your county application is still in progress, the tax is still a cost in the calculation until it is not. How that is documented, and whether we can rely on it, depends on where the application stands. So tell us early. A veteran who mentions the exemption after underwriting has priced the file has made the process harder than it needed to be.
★ We do not administer the exemption and we cannot accelerate a county office. We can tell you what documentation would let us use it.
★ What else moves residual income
- Paying off or restructuring consumer debt before application, which removes monthly obligations.
- Family size, which sets the threshold, and which you do not choose for this reason.
- The loan amount itself, which drives the payment.
- ★ Insurance and the escrow, which we quote from real figures rather than a rule of thumb.
★ What does not help: anything we would have to invent a rate for. We publish no rates or payment figures anywhere on this site.
Mike Certo, NMLS #260555. (480) 296-6513 · mcerto@cfmtg.com.
Frequently asked questions
What is VA residual income?
A VA requirement applied alongside debt-to-income: broadly, what is left of qualifying income each month after the mortgage payment, other debts and certain living costs. The thresholds vary by region and family size and rise with both.Why does this site not publish a VA residual income table?
As a matter of policy, not availability. The current authority is VA Pamphlet 26-7, Chapter 4 on the VA KnowVA portal. We do not reproduce underwriting tables on a marketing page because thresholds change and a stale figure is worse than none, so we quote your thresholds from the current chapter against your actual file.Does the Pennsylvania property tax exemption help a VA loan approval?
It can help directly. Residual income is calculated after shelter expenses, and property tax is part of the shelter figure for a homeowner, so an approved exemption removes that component entirely. Because residual income is a dollar test rather than a ratio, removing a fixed monthly cost helps in absolute terms.Should I tell my lender about a pending property tax exemption?
Yes, early. An approved exemption and a pending one are treated differently, and whether the tax can be excluded from the calculation depends on where the county application stands and how it can be documented.Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about VA home loan financing, not a loan commitment and not legal, tax or financial advice. Cornerstone First Mortgage is a private lender and is not affiliated with, endorsed by or acting on behalf of the U.S. Department of Veterans Affairs or any government agency. VA entitlement, funding-fee exemption and disability ratings are determined by the U.S. Department of Veterans Affairs. The Pennsylvania Disabled Veterans' Real Estate Tax Exemption is administered by the Pennsylvania State Veterans' Commission through each county Director of Veterans Affairs, not by Cornerstone; its criteria and income thresholds are set by the Commonwealth and change. Figures here carry the date we verified them against primary sources. All loans are subject to borrower, property and program qualification.