Since 1944, the Department of Veterans Affairs has issued VA loans to help service members and veterans purchase homes without down payments or private mortgage insurance (PMI). VA loan requirements change annually, so it’s important to understand the 2025 requirements if you’re considering this financing option. This guide answers questions about qualifying for a VA loan, including eligibility requirements, income standards, and application processes to help you determine if this financing option is right for you.

VA Loan Income Requirements

One of the benefits of VA loans is choosing your own private lender, though each may set different income and credit requirements for approval. These income requirements help you prepare for the VA loan application process, increasing your chances of securing favorable financing.

Income Sources and Qualifying Income

In general, the following income sources will be taken into account when you apply for a VA loan:

  • Employment income (full-time, part-time with 2-year history)
  • Self-employment income (2-year history required)
  • Military retirement pay
  • VA disability compensation
  • Social Security benefits
  • Pension and retirement account distributions
  • Alimony and child support (with 3+ years remaining)
  • Investment and rental property income
  • Interest and dividend income
  • Overtime and bonus pay (2-year history)
  • Commission income (2-year average)

Your lender might also look at any assets you might own, such as your savings accounts and investments. As with any mortgage, such as a traditional fixed-rate mortgage or VA loan, you want to show your lender that you can afford to pay off your loan by proving a reliable working history.

Use a VA loan affordability calculator to help you determine how much house you can afford based on your qualifying income.

Non-Qualifying Income Sources for VA Loans

Certain types of income don’t meet the VA loan requirements income standards and typically won’t count toward your loan application. The following income sources generally don’t qualify:

  • One-time bonuses or windfalls (lottery winnings, inheritance)
  • Income from jobs that will end soon
  • Unemployment compensation
  • VA educational allowances (GI Bill payments)
  • Temporary or seasonal work income
  • Income from brand new employment (less than 2 years)
  • Cannabis industry income (due to federal/state law conflicts)
  • Gifts or financial assistance from family
  • Income with no verifiable documentation
  • Sporadic freelance or gig work without consistent history

Remember that lenders evaluate income sources case by case, so some borderline situations may still qualify depending on your specific circumstances and lender guidelines.

Debt-to-Income Ratio

In addition to VA loan income requirements, there are also VA home loan debt-to-income requirements you might have to meet. Typically, your debt-to-income ratio refers to the percentage of your gross monthly income that’s used to pay off your debts.

To qualify for a VA home loan, the standard debt-to-income ratio is 41%. However, with compensating factors, higher debt-to-income ratios have been approved by Fannie Mae’s and Freddie Mac’s automated underwriting systems.

To calculate your debt-to-income ratio, simply add up all of your debt obligations — such as credit card debt, student loans, and car payments — and divide them by your gross monthly income, which is the amount of money you take home before taxes and other deductions are accounted for. 

You can also use our DTI ratio calculator to quickly calculate this metric. For more calculations, a VA loan calculator can help you estimate your total monthly housing payment including principal, interest, taxes, and insurance.

Credit History

Your credit score is often one of the most important factors in determining whether you’re eligible for a loan, as this number tells lenders how responsible you are with paying off debts. Each lender sets its own VA loan credit and income requirements. At Griffin Funding, our VA loan credit requirement for VA purchase loans is to have a minimum FICO score of 550.

Getting VA loan pre-approval early in the process helps you understand your qualification status and strengthens your offer when house hunting.

Residual Income Requirement for VA Loan

If your debt-to-income ratio is too high, your lender might not approve you for a VA loan. However, in some cases, you might be able to qualify for a VA loan with residual income, even with a high debt-to-income ratio.

Residual income refers to the amount of money you have leftover once you pay your debt obligations, such as your mortgage, property taxes and insurance, and revolving debt, that’s used for basic necessities like food and clothing.

The residual income requirement for a VA loan will vary depending on a variety of factors, such as the area you live in, the size of your family, and your mortgage amount. The VA looks at residual income because it wants to ensure veterans will be able to keep their household afloat while paying for their mortgage and other obligations. If your residual income is considered to be too low with a VA loan, you might be denied.

Meeting these income requirements for VA loan approval often requires careful budgeting and financial planning.

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VA Loan Limits in 2025

Depending on your circumstances, you might not have any VA loan limitations. With the passing of The Blue Water Navy (BWN) Vietnam Veterans Act of 2019, which became effective on January 1, 2020, most veterans are not subject to VA loan limits. In most cases, if you have full entitlement, there will not be any loan limits.

Please note that some lenders may add overlays on top of the VA handbook and limit your loan amount to $2 million, $3 million, or $5 million.

Full entitlement means you haven’t used your VA home loan benefit (both your basic and bonus entitlement) or paid a previous VA home loan in full and sold the property.

However, if you have remaining entitlement, you might be subject to a loan limit. Some situations where you have remaining entitlement include:

  • You have a current VA loan that you’re still paying back
  • You own a property that was paid for with a VA loan

The 2025 loan limits for a VA loan if you have remaining entitlement are based on the county you’re looking to purchase in.

What Do You Need to Qualify for a VA Loan?

In order to qualify for a VA loan, you must get a Certificate of Eligibility (COE). Your COE tells your lender that you meet the service history and duty status requirements for a VA home loan.

Aside from the VA loan income requirements for a VA loan discussed above, there are certain VA home loan requirements you must meet in order to obtain a COE.

  • You are a service member that has served at least 90 days during wartime or 181 days during peacetime.
  • You are a veteran that meets the basic length of service requirements, which, in most cases, are 90 days during wartime or 181 days during peacetime.
  • You are a member of the Reserves or National Guard who served at least six years.
  • You are an eligible surviving spouse of a service member who died during service or as a result of a service-related injury or disability, is missing in action, or a prisoner of war, and have not remarried.
  • You were a member of a government’s armed forces allied with the U.S. during WWII and are a U.S. citizen.

You can apply for your COE through the VA website, or you can ask your lender to help you get your COE. At Griffin Funding, we can help you apply for and obtain your COE. Once you meet the eligibility requirements for a COE, along with the VA loan income requirements, you’ll be able to work with your preferred lender and apply for a VA loan.

See If You Meet VA Loan Income Requirements

If you’re an active service member, veteran, or qualifying spouse looking to finance a new home, a VA home loan can help get you there. Once you meet the VA loan income requirements and obtain your Certificate of Eligibility, you’ll be on your way to securing a new home. 

Current VA loan rates remain competitive compared to conventional mortgages, making this an excellent time to explore your options. If you already own a home with a VA loan, you might benefit from a VA streamline refinance to lower your rate or a VA cash-out refinance to access your home’s equity for other financial goals

At Griffin Funding, we offer competitive rates and terms on our VA home loans, along with flexible requirements to qualify for a VA loan. Speak with one of our helpful loan specialists to learn more or get started online today.

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Frequently Asked Questions

Can you make too much money to qualify for a VA loan?

No, there are no income limits for VA loans. Unlike some other government-backed mortgage programs, the VA does not set maximum income thresholds that would disqualify high earners from using this benefit.

Does a VA loan require two years of employment?

​​While two years of employment history is preferred and makes qualification easier, it's not always required. Lenders may approve borrowers with less than two years of employment if they can demonstrate stable income and meet other qualifying factors.

What are the main benefits of VA loans for veterans?

VA loans generally do not require a down payment or private mortgage insurance and often have better interest rates than traditional mortgages. These features make them a highly beneficial option for veterans looking to buy a home.

What are the key VA loan income requirements?

Lenders look for steady income, such as full-time work or reliable part-time or self-employment, and may require a history of consistent earnings. Qualifying income sources and requirements can vary by lender, so it's important to show a dependable financial background.

How is the debt-to-income ratio calculated for VA loans?

Your debt-to-income ratio is calculated by dividing your total monthly debt payments by your gross monthly income. Most lenders look for a ratio of 41% or less, but some may allow higher ratios with compensating factors or sufficient residual income.

Who is eligible to apply for a VA loan?

Eligibility includes current or former service members who meet length of service requirements, members of the Reserves or National Guard with at least six years of service, and certain surviving spouses. A Certificate of Eligibility (COE) is required to show you meet these criteria.

Are there loan limits for VA loans in 2025?

Most veterans with full entitlement are not subject to loan limits due to recent changes in legislation. However, those with remaining entitlement or existing VA loans may face county-based loan limits set by the government.

Is it difficult to qualify for a VA home loan?

For eligible service members, veterans, or qualifying spouses, qualifying can be easier than with traditional loans, especially since no down payment is needed. Maintaining good credit and steady income helps improve your chances of approval.

What is residual income and why is it important for VA loans?

Residual income is the amount left over after all debts and obligations are paid each month. Lenders use this to ensure borrowers can meet basic needs while managing their mortgage, and having enough residual income may help you qualify even with a higher debt-to-income ratio.

What is VA loan entitlement?

The reason lenders are willing to accept borrowers with no down payment or mortgage insurance is because the Department of Veteran Affairs will cover a percentage of your loan if you default, which is called basic entitlement. 

What is a veteran’s basic entitlement? In 2025, the basic entitlement is $36,000 if your VA loan is under $144,000. If your VA home loan is over $144,000, the Department of Veteran Affairs will cover 25% of your loan, should you default.

When do you qualify for a VA loan?

You can qualify for a VA loan when you meet the length of service requirements set by the Department of Veteran Affairs. In most cases, you can qualify for a VA loan if you served at least 90 days during wartime or at least 181 days during peacetime.

Keep in mind that you must also meet the eligibility requirements set forth by your lender.

Bill Lyons is the Founder, CEO & President of Griffin Funding. Founded in 2013, Griffin Funding is a national boutique mortgage lender focusing on delivering 5-star service to its clients. Mr. Lyons has 24 years of experience in the mortgage business. Lyons is seen as an industry leader and expert in real estate finance. Lyons has been featured in Forbes, Inc., Wall Street Journal, HousingWire, and more. As a member of the Mortgage Bankers Association, Lyons is able to keep up with important changes in the industry to deliver the most value to Griffin's clients. Under Lyons' leadership, Griffin Funding has made the Inc. 5000 fastest-growing companies list five times in its 12 years in business.