Childcare Costs Count in VA’s Residual Income Analysis — Plan for It Upfront

 


Hey my fellow Veterans and Active Duty, did you know that childcare expenses are part of the VA’s residual income test?

When applying for a VA home loan, the VA doesn’t just look at your debt-to-income ratio. They also want to make sure you’ll have enough residual income—the money left over after paying your mortgage, taxes, insurance, and other monthly obligations. This safety net is what makes VA loans one of the most flexible and borrower-friendly programs available.

But here’s the catch: childcare costs count as an ongoing expense in this analysis. That means if you’re paying $800 a month for daycare, it’s factored in alongside car payments, credit cards, and other obligations.

Why this matters:

  • Childcare costs can be just as significant as a car payment or even part of your mortgage.

  • Failing to plan for it may leave you short of the residual income minimums that the VA requires by family size and region.

  • Factoring it in early helps avoid last-minute surprises during underwriting.

What you can do:

  • Be upfront with your loan officer about your childcare situation.

  • Gather documentation—daycare invoices, nanny agreements, or preschool tuition.

  • Consider how childcare costs may change soon (kids aging out, military spouse employment changes, etc.).

The VA loan program is designed to keep Veterans from becoming house poor. By making sure childcare is accounted for, the program protects families from being stretched too thin—especially during those busy parenting years when every dollar matters.

So if you’re a parent (or planning to be), make childcare part of your budget conversation from the very beginning of your VA loan journey.

#FamilyFinance #VALoan  #TX, #FL, #AL, #TN, #CO

About Between Two Doors

Between Two Doors is a podcast where I talk with Realtors about their journey, aiming to connect home buyers and sellers with agents on a more personal level. I ask "right brain" questions that go beyond transactions, focusing on the experiences, values, and passions that make these professionals great at what they do.

Listen to more episodes at: https://www.betweentwodoors.com

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