Which financing method does NOT utilize an income ratio for qualification?

The financing method that does not utilize an income ratio for qualification is VA loans. Unlike traditional loan programs that often use debt-to-income ratios to assess a borrower's ability to repay, VA loans primarily focus on the residual income model. This approach evaluates a borrower’s income and remaining income after deducting monthly debts and necessary expenses, ensuring that there is enough left to cover living costs and obligations.

VA loans are specifically designed for veterans and active-duty military personnel, offering benefits such as no down payment and no private mortgage insurance requirement. This unique structure reflects the government’s commitment to supporting veterans, which contributes to the more flexible qualification criteria that do not depend heavily on standard income ratios. This makes the evaluation process different from conventional loans, FHA loans, and USDA loans, all of which commonly use debt-to-income ratios to help determine borrower eligibility.