We get many questions about VA loan applications including whether or not a borrower can use his or her spouse's income to qualify for the VA mortgage.
Here's a good example of such questions: "Can I use my wife's income if she has been employed less than 2 years? And also, can I use child support she is receiving for another child in obtaining a better chance at approval?"
The VA loan rules that cover these issues are found in VA Pamphlet 26-7, the VA Lender's Handbook. Among many other issues, these rules specify the type of income defined by the Department of Veterans Affairs as "verifiable income" which can be listed to get VA loan approval.
But VA loan regulations aren't the only laws on the books that cover these issues. State and federal laws also play a part in determining whether or not spouse income can be included on the loan application and under what circumstances.
There are many questions that must be answered. Is the spouse obligated on the new VA loan? If so, all income from the spouse would be considered, as with any other co-obligor on the mortgage.
When it comes to child support, the spouse is not required to declare such income. However, child support cannot be counted unless it has been declared. Under the law, it's the borrower's decision as the Fair Housing Act forbids lenders from requiring child support payment details.
In cases where the spouse is not obligated on the VA loan, the laws of the state may determine whether or not the spouse's income may be counted. These "community property laws" are based on the shared financial obligations the married couple has.
If the borrower resides in a community property state, spouse income may be counted. The previously mentioned child support rules apply in these cases. If the borrower does not reside in a community property state, chances are that the only way spouse income might be counted is by having the spouse obligated on the new loan. Check with your loan officer to see what state or federal laws might apply in your specific circumstances.
