VA Loan Articles

What is a Joint VA Loan?

When a veteran or active duty military member wants a VA mortgage, they have several basic loan application options. The first is to take out a VA loan themselves, with no co-signer or co-borrower. The second is to apply for a VA mortgage loan with their spouse. Your husband or wife can provide additional credit clout when applying. Another option is to take out a joint loan with a co-borrower who is not a spouse or a military member.

The joint loan is permitted by the VA, but there are conditions. The VA guaranteed loan is only extended to the veteran and the other applicant is not backed by the VA loan. This means there's no "coverage" on the non-veteran's end if the loan goes into default and foreclosure.

For this reason, some joint applicants may have some initial trouble finding a bank willing to issue a joint loan, but there are loan officers willing to work with your specific case. Since there's no protection for the lender from the VA for the non-military co-borrower, the bank may require a down payment on the non-guaranteed part of the loan.

As with any co-borrower loan, both parties can use their income and credit information to qualify for the VA mortgage. The credit information from your co-borrower affects the status of your loan, so be sure to check both debt-to-income ratios and other factors which might affect your application. It's advisable to start examining credit reports a year before you want to commit to a VA mortgage. If you or your co-borrower discover credit problems, you'll have plenty of time to dispute erroneous credit report information or fix debt-to-income ratios that could be a problem when you go to apply for the VA loan.

Joint VA loans are unusual two ways. The first is that the military member or veteran must prove income sufficient to cover their portion of the joint loan. A situation where the civilian co-borrower assumes most or all of the financial responsibility for the loan isn't permitted. Another unusual requirement--the lender must submit joint loans to the VA for approval before the loan is issued.

While these terms and conditions are unique, it should not deter you from considering a joint VA home loan if you've given it careful thought and are prepared to enter into a long term commitment with your co-borrower. Ask your loan officer for more information on how to apply for a joint loan and what paperwork your non-military borrower needs to supply to begin the process.

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