Joint VA Home Loan: Applying with a Non-VA Co-Applicant
According to the VA, it is possible to buy a home through the VA Home Loan program with a co-borrower who is not your spouse or eligible for VA benefits. This is called a “Joint VA Loan.” If you are applying by yourself or with your spouse, the process is pretty simple. As long as you qualify, all you need to verify is your Certificate of Eligibility (COE). There are a few extra steps to take when applying for a Joint VA Loan, however, but if this is want you want to do, don’t let these extra steps discourage you.
What are the specifics on the Joint VA Loan?
Typically, a Veteran/Non-Veteran Joint Loan is the type of loan you will want to apply for if you are looking to finance a Joint VA Loan. This simply means that at least one of the borrowers is eligible for VA benefits and the others are either not eligible for VA benefits or is not using them for this process.
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 two borrowers who are not VA-eligible
- One non-veteran borrower and three VA Home Loan eligible borrowers
- Two non-eligible borrowers and two borrowers using their VA Home Loan benefits
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 approved and underwritten by your VA-qualified lender. Instead, your lender will have to send your application into the VA for approval. So, make sure you get approved for your home purchase ahead of time.
Each person applying for the Joint VA Loan must have sufficient credit. Also, if the VA-eligible applicant does not have good enough credit, this cannot be made up for with the credit of the non-VA applicant. Additionally, the VA borrower has to have enough income to qualify under their own portion of the mortgage payments.
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. As an example, 3 qualified service members or veterans can buy or build a residential property with seven family units (four standard units and one additional unit for each VA-borrower) and one unit for business purposes. That is 8 units total.
If you would like to get started today in search of a Joint VA Loan, contact one of the qualified lenders in the Veterans Authority network.