Understanding Joint VA Home Loans

Understanding Joint VA Home-Loans

Understanding Joint VA Home Loans

Joint VA Home Loan: Applying with a Non-VA Co-Applicant

There’s a familiar question surrounding VA home loan entitlement; “If my father was a veteran can I get a VA loan?” The short answer is no, that is not possible. The reason being, VA mortgages are intended for veterans and their spouses, and that VA loan entitlement does not extend to non-veterans.

That said, it is possible to buy a home through the VA Home Loan program with a co-borrower who is not your spouse OR a military member or veteran. And it is also possible to apply for a VA mortgage with another person who is eligible for a VA mortgage too.

This process is known as a VA Joint Loan mortgage.

What Is A Joint VA Loan?

If you are eligible for VA benefits and apply for a VA mortgage with your spouse, this is not treated as a joint loan between a military member and another veteran or a non-veteran. 

VA loan spouse requirements state that when applying with a legally married spouse both parties are treated as one–the VA loan entitlement is used, the veteran and spouse apply together and the veteran’s VA loan is approved for the full amount of the loan even though the spouse may not be in the military. 

You read that correctly; the VA treats the married couple differently than two veterans or a veteran and a non-spouse veteran applying for the same type of mortgage.

Here are some examples of the Veteran/Non-Veteran Joint Loan:

  • A veteran and their non-spouse partner who is not a veteran
  • One veteran with VA entitlements and any other borrower who is not  not eligible for a VA mortgage.
  • One non-veteran borrower and one or more VA Home Loan eligible borrowers
  • Two non-eligible borrowers and two borrowers using their VA Home Loan benefits

Non-veterans who apply with the veteran to get a VA mortgage are not being given VA loans–they are being offered a conventional loan that has no VA guarantee. The veterans who apply DO get offered a VA-guarantee for their portion of the mortgage only. The VA does NOT cover losses incurred on a joint loan by the non-military applicant who is not a spouse.

VA Joint Loans: Calculating The Maximum Loan Per Borrower

VA loans do not come with loan limits for those who have 100% of their entitlement available to use for the mortgage. That’s a change from earlier policies which established VA loan limits by county, and some borrowers may be surprised to learn that in such cases you and the lender will negotiate the final loan amount.

When calculating the loan, the lender will review how many people with VA loan entitlement (see your Regional VA Loan Center if you need help with your VA loan entitlement or Certificate of Eligibility) are involved in the transaction. If a veteran and a non-spouse veteran apply for a VA loan together, each veteran is charged a proportional share of the entitlement. No veteran can assume more of the financial responsibility than any other borrower in typical cases–VA loan entitlement is charged equally among all qualifying veteran borrowers.

However, there is one exception in VA Pamphlet 26-7. “If only unequal entitlement is available, unequal charges may be made with the written agreement of the Veterans.” 

If four people apply for a mortgage and two use their VA loan eligibility, the loan is split four ways and the veteran is charged only for the amount of VA loan entitlement needed to cover that specific share of the four. Four borrowers, two of which use a VA loan. That means that 25% of the loan is each veteran’s responsibility.

No borrower on the loan can make up for the unsatisfactory credit of another applicant–this is an important thing to keep in mind when considering your Joint VA loan options.

VA Joint Loan: who exactly is a borrower?

  • A borrower not eligible for VA benefits and a borrower who is
  • A borrower using their VA Loan benefits and multiple borrowers who have benefits but are not using them for the home purchase
  • Several borrowers who all qualify for VA Home Loan benefits and who are all using them for the purchase
  • A married couple who are both eligible for a VA Home Mortgage and who are both using their benefits for the purchase

Are the VA loan limits different with the Joint VA Loan?

When you’re pursuing a Joint VA Loan, the loan limits you might be eligible for are different than if you are applying for a standard VA Home Loan. When considering joint borrowers, here is how the Department of Veteran Affairs figures how much it will guarantee:

(Home price) ÷ (Number of borrowers) = Y

(Number of borrowers who are VA-eligible) multiplied by Y = Z

Once you get Z, use the chart below to figure the maximum amount the VA will guarantee.

Loan Amount Max Guaranty Potential Special Provisions
Up to $45,000 50% of Loan Amount On IRRRL, Minimum Guarantee of 25%
$45,001 to $56,250 $22,500 On IRRRL, Minimum Guarantee of 25%
$56,251 to $144,000 40% of Loan Amount – Max of $36,000 On IRRRL, Minimum Guarantee of 25%
$144,001 to $417,000 25% of Loan Amount On IRRRL, Minimum Guarantee of 25%
Greater than $417,000 The Lesser of the following:

25% of Loan Amount

25% of VA Loan Limit by County

On IRRRL, Minimum Guarantee of 25%

Using the VA’s formula for determining the guaranteed amount on a Joint VA Loan, if we use the example of 4 people buying a house for $400,000, with 2 of them eligible and using their VA Home Loan benefits, here’s how it would look:

($400,000) ÷ (4) = $100,000

(2) multiplied by $100,000 = $200,000

Then, looking at the chart: $200,000 X 25% = $50,000

So, in this example, the VA would guarantee $50,000 on the $400,000 home purchase. In some cases, the guaranteed amount will be less than 25% with a Joint VA Loan. If this is the case, you and your co-borrower(s) will need to either supply a down payment to cover the bank’s risk or search for a lender who will finance a $0 down Joint VA Loan with less than 25% of the home’s value insured.

Also, it is important to know, the Department of Veteran Affairs will insure either the amount calculated by using the above chart, or the maximum amount of benefits between all borrowers. So, even if each VA-eligible borrower in our scenario is eligible for $36,000 in benefits, they will still only have $50,000 guaranteed. Not $72,000.

What are some other specifics on the Joint VA Home Loan?

Mortgages involving co-borrowers who are not married cannot be automatically approved and underwritten by your VA-qualified lender. Instead, your lender will have to send your application into the VA for “prior approval”. 

VA loan rules in VA Pamphlet 26-7 Chapter 7 state that in cases where a married couple applies for a VA loan together, “…for which the Veteran and Veteran’s spouse will hold title to the property: whether or not the spouse also uses entitlement, may be closed automatically by the lender with automatic authority.”

If multiple borrowers are eligible and using their VA Home Loan benefits to purchase a property, it is possible to purchase a property with multiple units. This property can include 4 family units plus one unit for each VA-qualified borrower who is contributing to the property ownership, and one unit for business. 

If you would like to get started today in search of a Joint VA Loan, contact one of the qualified lenders in the Veterans Anonymous network.

4 Comments
  • Emily Huskins
    Posted at 18:56h, 16 July Reply

    What would this situation look like possibly?
    Step dad is a Vet, married to my mom, all three of us want to go in on a Joint VA loan. My mom is married to my step dad (the vet) and I am not military so it would be one Vet and two non Vets. We are looking at a 500k loan. What does that look like down payment wise?

  • Keri Keefe
    Posted at 23:45h, 01 October Reply

    Unique situation here – My father is a disabled veteran (not service related disability). He is buying a home with my husband & I and my sister-in-law because he cant live alone any more. He has no income other than SSI. We have decent incomes and a large downpayment and are pre-approved for a typical home loan. Can we use his VA loan as well and hopefully decrease our combined down payment?

  • Keith
    Posted at 05:50h, 30 September Reply

    So based on the logic of this article, if I had a purchase price of $585,000 with one Veteran borrower and a non-spouse co-borrower. The VA would look at $292,000 of the loan and back 25% of that, being $73,125. Which would be 12.5% of the total loan. Meaning that we would be required a down payment of the same $73,125 in order to meet the 25% total of the $585,000 purchase price?

  • Mar
    Posted at 02:00h, 27 August Reply

    Is a non-working spouse (has not worked for over 20 years) required to be on a VA Loan with the qualifying spouse to purchase a home?

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