A VA loan approval is not a budget. Lenders qualify veterans on two tests from the VA Lender's Handbook: total monthly debts at or under 41% of qualifying income, and a minimum residual income left over after taxes, debts, the full housing payment, and a maintenance estimate of 14 cents per square foot. Because VA disability compensation is tax-free, the Handbook instructs lenders to gross it up to 125% of face value for the debt-ratio test, which is why a rated veteran can be approved for far more house than the same salary alone would support. Residual income, by contrast, is always real cash and never grossed up. The result is that many veterans, especially those fresh out of service, are approved for a payment that technically clears both tests and quietly consumes their life. This calculator solves both ceilings from your actual income stack, names which rule is setting your limit, and puts a comfortable number next to the approved one so the gap is visible before you fall in love with a listing.
What brings you here?
How this tool works
Two ceilings, solved separately. The lender's ceiling is the lowest price that passes every underwriting test: total debts at or under the DTI guideline on qualifying income, the VA residual income requirement, and, if you have an active VA loan, your county's loan limit. The comfortable ceiling uses the classic 28/36 rule: the full housing payment at or under your chosen share of actual gross income (28% by default), and housing plus all debts and child care at or under that share plus 8 points (36%). In still-serving mode BAH is excluded from the comfortable basis, since the lender counts it today and it ends at separation. If you answer the readiness questions, they tighten that share (yellow minus 3 points, red minus 6, thin reserves after close up to 3 more, floor 15%), and your net worth caps the comfortable price so a 10% dip in home value erases no more than 35% of it. Readiness never changes the lender's ceiling. Because taxes and insurance rise with price, each ceiling is found by search rather than a single formula.
The gross-up, done the way lenders do it. Tax-free income (VA disability compensation, BAH, other non-taxable sources) is multiplied by your gross-up percentage for the DTI test only. Residual income is computed on real cash: taxable income minus federal tax (2026 brackets, IRS Rev. Proc. 2025-32), state income tax (Tax Foundation 2026), and FICA, plus tax-free income at face value, minus debts, the full housing payment, child care if entered, and a maintenance estimate of 14 cents per square foot of living area. The required residual comes from the VA Lender's Handbook table for your region, family size, and loan bracket.
What we model. The funding fee (2.15% first use, 3.30% subsequent, waived for any veteran receiving compensation), your state's average property tax rate and veteran exemption at your rating (verified August 2026), homeowners insurance at a national-average rate, HOA dues, and the two Handbook exceptions that let a loan close above 41% DTI. What we don't. Lender overlays, credit score pricing, county-level tax variation, closing costs beyond the funding fee, and PMI (VA loans have none). Rates and the gross-up percentage are editable assumptions, labeled as such. This is an educational estimate, not a pre-qualification or financial advice. Data stamp: August 25, 2026.