Buying process
How lenders qualify you for a VA loan
Short answer
VA does not set a minimum credit score, but most lenders want 580 to 620, and IHDA assistance requires 640. VA uses a 41% debt-to-income benchmark, and also checks residual income: the cash left each month after the mortgage, taxes, debts and living costs. In Illinois (VA's Midwest region), a family of four borrowing $80,000 or more needs at least $1,003 a month in residual income.
Credit
VA reviews your credit history but leaves the score floor to lenders. Common lender minimums are 580 to 620. If you want to pair your VA loan with IHDA down payment help, plan on a 640 score. After a bankruptcy or foreclosure, VA guidelines typically look for two years of re-established credit. Waiting periods in detail.
Debt-to-income
VA’s benchmark is 41% of gross monthly income going to housing plus monthly debts. It is a guideline, not a hard cap. Loans above 41% can be approved when residual income is strong. VA says that if residual income is at least 120% of the table amount, the higher ratio needs less scrutiny.
Residual income, Midwest region (Illinois)
| Family size | Loans under $80,000 | Loans $80,000 and up |
|---|---|---|
| 1 | $382 | $441 |
| 2 | $641 | $738 |
| 3 | $772 | $889 |
| 4 | $868 | $1,003 |
| 5 | $902 | $1,039 |
| Each additional member | +$75 | +$80 |
Family size counts everyone in the household, including a spouse who is not on the loan.
Residual income calculator
Income lenders count
- Base military pay, plus BAH and BAS for active-duty borrowers
- VA disability compensation, which is tax-free and can be grossed up
- Civilian wages with a two-year history, and self-employment with tax returns
- Military retirement and Social Security
- Rental income from the other units of a two- to four-flat, with conditions (details)
Common questions
What credit score do I need for a VA loan in Chicago?
VA has no minimum. Most lenders ask for 580 to 620, and IHDA's assistance programs require 640.
What is VA residual income?
The money left each month after your mortgage payment, taxes, insurance, debts and estimated living costs. VA sets minimums by region and family size.
What is the maximum DTI for a VA loan?
VA uses 41% as a benchmark rather than a cap. Higher ratios can be approved with enough residual income.
Sources
What will your VA funding fee be?
Enter a price and down payment to see the 2026 fee, or check whether you are exempt.
An independent guide. Not affiliated with or endorsed by the U.S. Department of Veterans Affairs, and not a lender. General information, not legal, tax or financial advice.