Key Requirements for a Veteran & Non-Veteran Co-Borrower

When a veteran and a non-veteran (who is not the veteran’s spouse) apply for a VA loan together, the loan is considered a joint VA loan, and different rules apply compared to a standard VA loan. Here’s what you need to know:

Down Payment Requirement

When a non-veteran (not a spouse) is on the loan, the VA only guarantees the veteran’s share.

A down payment is required to cover the unguaranteed portion of 12.5% down.

Example: If a veteran and a non-veteran split ownership 50/50, the VA only guarantees 50% of the loan amount. The other half must be covered by a down payment.

Credit & Income Qualifications

Both borrowers must meet credit and income requirements set by the lender.

The lender will calculate combined income and debts to determine loan approval.

Loan Limits & Entitlement Usage

The veteran must have enough remaining VA entitlement to qualify.

If a previous VA loan hasn’t been fully repaid, bonus entitlement may be needed.

Occupancy Requirement

The veteran must occupy the home as a primary residence.

The non-veteran co-borrower does not have to live in the home but must qualify financially.

When Does It Make Sense to Have a Non-Veteran Co-Borrower?

If the veteran needs additional income to qualify for a larger loan amount.

If the non-veteran is a close family member or business partner helping with the purchase.

If the veteran has limited entitlement available and needs a co-borrower to strengthen the application.

Pros of a VA Loan with a Non-Veteran Co-Borrower

Allows the veteran to qualify for a higher loan amount

Combines incomes to meet debt-to-income (DTI) ratios

Competitive VA loan rates still apply

To learn more about the Veteran and Non Veteran co borrower option contact me today 619-208-6499