Is it considered discrimination based on familial status for a bank to have a residual income limitation for a residential real estate loan. For example, to require $150 per month per dependent in residual income or additional net disposable income.

-- SDM (smarsh5272@msn.com), January 09, 2001

Answers

It depends. The VA sets residual income limits that it applies to all applicants requesting a VA loan. Many lending institutions adopted these guidelines to help prevent against equity-only based lending issues - i.e. lenders giving out loans without proving a borrower's ability to repay.

Some lenders set higher limits than the VA sets. In these cases, the lender would likely have to prove that it is a business necessity or otherwise there could be potential for litigation.

-- Doug Shagam (doug_shagam@bcgroup.com), June 23, 2001.