Final answer:
Residual income is considered when evaluating eligibility for a VA loan to ensure veterans can manage their living expenses after paying their debts, which helps reduce the risk of loan default.
Step-by-step explanation:
Residual Income is indeed taken into consideration for a VA loan. The correct answer to your question is A. True. Residual income is the amount of net income remaining after all monthly debts have been paid. It’s used by the Department of Veterans Affairs (VA) to ensure that veterans have sufficient funds left over each month to cover living expenses after homeowner expenses and other debts. The VA sets forth specific residual income requirements that vary by family size and region. These requirements are in place to prevent veterans from becoming over-leveraged with their home loans, thereby reducing the risk of default.