“I had another kid—how’s it going to impact my VA loan?”

My name’s Evan Kaufman, a VA loan originator, here to help explain.

So—kids, or let’s just say adding dependents—can those really affect my VA loan qualifications?

Yes, they can, and we’re going to talk about two major reasons or areas where it impacts you.

1. Residual Income (The Less Positive Impact)

First, we’re going to talk about residual income, which is a key part of qualifying for a VA loan.
Then second, we’ll talk about a more positive angle that can actually improve your qualification.

So let’s start with residual income.

You’ve probably heard the term debt-to-income ratio (DTI). It drives a lot of decision-making in mortgages. That’s where we take your total monthly debts, divide them by your total monthly income, and get a percentage. That ratio determines your general borrowing ability.

Now, with VA loans, there’s an extra component that’s unique compared to all other loan types:
It’s called residual income.

Yes, DTI still matters. However, the VA really focuses on this concept of residual income to make sure a veteran still has enough breathing space to comfortably afford the home.

That’s why, in other videos, I’ve said that you can sometimes have a higher DTI ratio with a VA loan than with other loan types—because they’re looking more at residual income than just DTI.

Residual income isn’t a simple calculation. It factors in:

• Your taxes

• The square footage of your home

• Your region of the country

• And—your family size

So yes, the number of dependents you have can affect your qualification for a VA loan.

Again, this isn’t necessarily a negative, but it does decrease your borrowability slightly. We’ll get to the positive side in a moment.

How Does It Work?

There’s a chart the VA publishes each year showing the minimum required residual income for different regions of the country—broken out into zones like the Southeast, Southwest, etc.—and by household size.

For example, if you’re a family of two, there’s a certain minimum monthly amount of income you need to have left over (after debts, taxes, etc.) to qualify.
If you’re a family of four, that number goes up.

So effectively, the VA is saying:

“This is the minimum amount of money we need to see you retain after all expenses to ensure financial stability.”

The more kids you have, the higher that required number goes.

Now—don’t worry—this doesn’t mean “Don’t have a kid” before applying for a VA loan.
It’s not a massive increase, and we’re definitely not trying to implement population control here!

(I love kids, by the way—I’ve got four of them!)
We just want to make sure you’re aware that if your loan officer is asking for clarification on dependents, it’s because it impacts your VA loan qualification.

And if you undermark the number of dependents—or you skip that field thinking, “Ah, it doesn’t really matter,”—you could be in for a surprise later.
It could even jeopardize your loan if the information has to be corrected mid-process.

So always make sure the number of dependents is accurate, because that directly affects the residual income calculation for your VA loan.

2. VA Disability Compensation (The Positive Impact)

Now, here’s the positive side:

For veterans who have VA disability income, adding a child can increase that income.

If you’re receiving VA disability compensation and you have another child, you can apply to add that dependent to your claim.

Doing this will result in additional monthly income—and that can make a meaningful difference in your loan qualification.

We’ve seen folks going through the home search process have a child and then update their VA disability claim. They get an extra $60 to $90 a month, sometimes more.

That additional income could translate to thousands of dollars in extra borrowing power over the life of the loan.

So if you receive VA disability compensation, don’t forget to file that update for every new child. Work with the VA to make sure it’s added.

Summary

So there you have it—the two ways kids (or dependents) can impact your VA loan qualification:

1. Residual income requirements go up slightly with each dependent, which can reduce your borrowing ability.

2. VA disability income can go up with each dependent, which may improve your borrowing ability.

My name is Evan Kaufman, your VA loan originator.
Take care.