Joint VA Loan | Requirements 2023
VA loans are backed by the U.S. Department of Veterans Affairs. Borrowers who are eligible for a VA loan may be eligible for a joint VA loan.
To apply for a joint VA loan, at least one of the applicants must meet the military service obligations or be an unmarried widow or widower of a qualifying military member.
Let’s take a closer look at what a joint VA loan is and what to consider before applying.
What is a joint VA loan?
A joint VA loan is a VA-backed home loan for a military borrower and an additional co-borrower (or co-borrowers). At least one of the borrowers must meet the military service requirements or be an unmarried widow or widower of a qualifying veteran.
Not all borrowers on a joint VA loan need to meet the VA loan service requirements. However, if multiple borrowers do meet the service requirements, they can also apply their VA entitlement.
When to use a joint VA loan
A joint VA loan is a useful option for military homebuyers. Here’s when it might make sense to use a joint VA loan:
- Income limitations: If you cannot qualify for a VA loan based on your income alone, then adding another member of your household could boost the income considered for the loan.
- Debt-to-income ratios: Most lenders prefer VA home buyers to have a debt-to-income (DTI) ratio of 41% or less. If a qualifying VA borrower has a higher DTI ratio, adding in the debt and income of another borrower could lower the ratio.
- Your VA entitlement is already used: If you currently have a VA loan on your existing home, then your VA entitlement is reduced. For households with more than one military member or veteran, applying for a joint loan with the other person’s VA entitlement could help you obtain a new home by increasing the overall amount of entitlement available.
Ultimately, a joint VA loan is a good option for households with at least one VA-eligible borrower that want to pool their resources for a home purchase. Since many households have more than one income earner, applying for a VA loan together can put homeownership within reach.
It’s important to note that you don’t need a joint VA loan if you are applying for a VA loan as a married couple. For the purposes of the VA loan, a veteran’s spouse is counted as the same entity as the veteran. So, as long as one of the spouses has the required military experience, they are eligible for a regular VA loan. A spouse borrowing with a VA-eligible borrower can use their income to boost the veteran’s income on the loan application.
Different types of joint VA borrowers
When it comes to joint VA loans, there are two types of borrowers:
- Military and non-military borrowers: In this case, one of the loan applicants has military eligibility for a home loan but the other applicant doesn’t have any eligibility on their own for a VA loan. For example, a military borrower could apply for a joint VA loan with an unmarried partner or another member of their household who doesn’t have military qualifications.
- Multiple military borrowers: Multiple military borrowers can apply for a joint VA loan together to pool their resources. In this case, the funding fee and entitlement of each borrower would be divided equally. Even though veteran borrowers can pool their income and resources, each must meet the minimum credit qualifications.
How to qualify for a joint VA loan
If you want to move forward with a joint VA loan, you’ll need to start by qualifying. Here’s what you’ll need to do:
- Check your eligibility: The process of any VA loan starts with obtaining a Certificate of Eligibility (COE). Your lender can help you request this. Although most VA buyers must meet military service requirements, some surviving spouses are eligible for this loan type as well.
- Confirm your entitlement: The amount you are entitled to borrow will be listed on your COE. Most eligible veterans will receive a full entitlement.
- Research your funding fee: Funding fee amounts vary based on your eligibility. Take the time to confirm your exact funding fee obligations. The funding fee is part of the closing costs for a VA loan but can be financed into the total cost of your loan.
- Understand mortgage borrowing requirements: The VA loan doesn’t have a set minimum credit score requirement but many VA lenders will impose a minimum credit score of 620. In addition, borrowers need to meet their lenders’ requirements for employment history, credit history, DTI, and other financial guidelines.
Pros and cons of a joint VA loan
As with all home loans, a joint VA loan comes with some advantages and disadvantages to consider.
Here’s a look at the pros:
- Increased borrowing power: When military service members pool their resources, you can significantly increase the amount you could borrow for your home purchase. With that, you could possibly afford a larger home purchase price.
- Buy a home with someone other than a spouse: You can use a joint VA loan to purchase a home with friends or family. But it will still need to be the primary residence of all borrowers on the loan.
- Better mortgage rates: Most eligible veterans can tap into better interest rates through a joint VA loan over other mortgage loan options.
- No mortgage insurance: The VA loan doesn’t require ongoing mortgage insurance. That’s a big win for most budgets.
Now for the cons:
- Down payment implications: The VA loan normally doesn’t require a down payment. But with a joint VA loan, you might be required to make a down payment if your co-borrower is not VA-eligible.
- Occupancy requirements: All of the borrowers must intend to live in the home as a primary residence.
Joint VA loans & VA entitlement
VA loan entitlement is the basis of the VA home loan. The Department of Veterans Affairs offers lenders a guarantee to repay the entitlement amount if a borrower defaults on their loan. It’s the maximum amount that the VA is willing to guarantee on the loans made by lenders to qualifying veterans.
Most veterans and military members qualify for the full entitlement when taking out their first VA loan. Even if it’s their second VA loan, they may have a full entitlement if they’ve repaid their first VA loan in full.
If applying for a joint VA loan, not all of the military members on the loan have to use their full entitlement.
How do joint VA loans differ from other VA loans?
The biggest difference between a joint VA loan and other VA loans is the list of applicants for the loan. If military borrowers are applying for a loan together, it shouldn’t impact the process too much.
But if a military borrower is applying with a non-military borrower, then the non-military borrower will likely need to meet additional requirements. For example, the VA will only guarantee the VA-eligible borrower’s portion of the joint VA loan. This means that the non-military borrower will need to come up with a down payment of 25% (equivalent to the guarantee offered by the VA) for their portion of the loan.
Is a joint VA loan right for you?
VA home loans offer a number of valuable benefits for eligible borrowers. In many cases, it’s likely to be your best home loan option.
But a joint VA loan isn’t the right option for everyone. Since many borrowers consider the lack of a down payment requirement one of the best VA home loan benefits, giving that up to add a non-military borrower might not be worth the upfront costs.
And remember, a joint VA loan is just one type of loan. Other popular loans include FHA loans and conventional mortgages.
Joint VA loan FAQ
Can a non-citizen jointly be on a VA loan?
In some cases, non-citizens can be on a VA mortgage. But it varies based on the situation. The non-citizen must be legally able to reside in the U.S.
Can you buy a house jointly with a VA loan?
Yes, you can buy a house jointly with a VA loan. At least one of the borrowers must meet the military service requirements to qualify for a VA loan.
How does a joint VA loan work?
A joint VA loan works in a similar way to the VA loan. Multiple applicants with the necessary military qualifications can apply together. Or the military borrower can apply with a friend or family member.
What is a joint VA loan?
A joint VA loan occurs when two or more people apply for a VA loan together. It is one of many loan options for home buyers.
Who can be on a VA loan together?
A borrower with the appropriate military eligibility can apply for a VA loan with their spouse. If seeking a joint VA loan, the co-borrowers can be other VA-eligible borrowers or non-military borrowers.
Can I put my girlfriend or boyfriend on my VA home loan?
You can put your unmarried partner on your VA home loan. However, if your boyfriend or girlfriend is not also VA-eligible, then they’ll need to make a downpayment for their portion of the loan.
Does the VA allow a co-signer?
You can get a co-signer for a VA loan if they live in the house with you.
Can an unmarried couple apply for a joint VA loan?
Yes, an unmarried couple can apply for a joint VA loan together. But the process will look different from a regular VA loan. Notably, there will be a down payment requirement involved.
Are VA loan limits different with a joint VA loan?
When applying for a joint VA loan, the loan amount you qualify for may be more than if you applied on your own. That’s because the income and entitlements of other borrowers might be pooled.