Can You Get a VA Loan with a Co-Borrower?
Using a co-borrower to buy a home can make it easier to qualify for financing.
For example, if you have less than perfect credit or don’t make enough money to qualify for a mortgage, you might need a co-borrower, or if you’re married, you likely want to go on the VA loan together.
But how does a co-borrower work with a VA loan?
The good news is it’s possible to have a co-borrower on a VA loan, but it’s more complicated than other loans.
Getting a VA Loan with a Spouse
You can use your VA loan benefits without issues if you are married.
The VA treats a joint loan with a spouse the same as if it was just the veteran applying for the loan.
Therefore, if your spouse has better credit or you need their income to qualify for the loan, it doesn’t change much about the VA loan process.
Getting a VA Loan with a Non-Spouse
If you borrow a VA loan with someone you aren’t married to, such as a friend or other family member, it’s not as simple.
The VA only guarantees the loan for the veteran, not the non-spouse borrower.
You’ll need a down payment in most cases because the VA will only guarantee half of the loan.
How much you must put down varies by lender, but it’s typically 25% of the portion of the loan not guaranteed by the VA.
Borrowing a VA Loan with Another Veteran
If you buy a house with another veteran but not your spouse, there are a couple of ways you could work it.
You could use one person’s entitlement if they have full entitlement.
You wouldn’t need a down payment and would have the full VA guarantee. It’s like buying the home yourself.
You can split the entitlement between veterans.
For example, if both veterans have entitlement, you can split the entitlement and have the full VA guarantee and not need a down payment.
What to Know About Borrowing with a Non-Veteran Co-Borrower
If your co-borrower isn’t your spouse and not a veteran, the lender will likely scrutinize their qualifying factors more than yours.
However, since the VA doesn’t guarantee their portion of the loan, the lender must ensure that the person qualifies for it.
This might mean they require a lower debt-to-income ratio, higher credit score, or more money down to make up for the risk; it varies by lender.
All co-borrowers must occupy the property
Whether you are buying a home with your spouse, another veteran or a family member, the VA requires all borrowers on the loan to occupy the property.
Mortgage underwriters have their way of confirming this information before closing on a VA loan.
Co-borrower on VA Loan – Final Summary
Having a co-borrower on a VA loan is possible.
However, the best-case scenario is borrowing with a spouse or another veteran because if you buy a home with a non-veteran, the VA won’t guarantee the full loan because of the risk involved.
This doesn’t mean you can’t buy a home with a non-veteran, but lenders will require a down payment and may be stricter with the qualifying requirements to ensure you can afford the loan without a high risk of default.
Are you ready to apply? Start the process by completing the form below.