The VA uses "Debt to Income" ratios to help assess whether a borrower can afford to repay the loan. Most loans out there today will use some form of this, but the VA also takes additional items into consideration regarding repayment. For instance, the square footage of the house, as well as if the borrowers have any day-care expenses for children, can also be considered. The reason why the VA does this is actually pretty logical. A person who has no kids doesn't need as much left over income to be able to repay as someone making the same amount of money but has 5 kids to care for.

Depending on other factors, such as credit score and assets, the actual maximum debt that can be allowed to approve a loan can vary.

The one time debt ratios is not considered is with a VA streamline refinance.  The VA believes that if you could afford the loan initially, then you can afford it now with a lower interest rate.