Va Loan Co-Borrower: Can A Son-In-Law Qualify?

A co-borrower on a VA loan is typically the Veteran's spouse or another Veteran who lives in the home and meets the financial guidelines. However, the VA does not expressly prohibit non-spousal co-borrowers, and it is possible for a Veteran to have a non-Veteran family member or non-family member as a co-borrower on a joint VA loan. In such cases, the VA will only guarantee the eligible Veteran's portion of the loan, and a down payment may be required. The co-borrower's income, credit score, and financial history will be considered, and they will share ownership and debt payment responsibilities.

VA loan co-borrowing requirements

VA loan co-borrowing is a great way to help prospective homebuyers qualify for a loan. A co-borrower typically shares responsibility for mortgage payments and benefits of homeownership, such as owning a portion of the home's equity. It is important to note that each applicant on a VA loan must meet the VA's and lender's requirements, such as minimum credit score and debt-to-income ratio.

There are various co-borrowing scenarios allowed by the VA. Firstly, a Veteran can co-borrow with a non-Veteran spouse or another eligible Veteran. In this case, no down payment is required. Secondly, a Veteran can take out a joint VA loan with a non-Veteran, non-spouse co-borrower, including a brother, father, or unmarried partner. This is also possible with other family members or even non-family members who have a good credit report. Thirdly, two married Veterans can take out a joint VA loan, with the option for both to use their entitlement or only one. Finally, two non-married Veterans can also take out a joint VA loan, with both using their entitlement.

It is worth noting that a co-borrower does not need to be a family member. Additionally, a Veteran can have a non-occupant co-borrower, meaning the co-borrower does not live in the home securing the loan. This scenario is often used to help the Veteran qualify for a mortgage.

In the case of an engaged or married couple, the VA loan standards recognise both applicants equally. It is also important to note that a co-signer is different from a co-borrower. A co-signer does not need to be a spouse and guarantees the debt if the primary borrower cannot qualify for a VA loan. Their income is not used to qualify for the loan but for liability purposes.

VA loan co-signing criteria

VA loans allow co-borrowers as long as they meet the VA's and lender's requirements, such as minimum credit score and debt-to-income ratio. The VA typically allows a maximum of four borrowers on any loan.

Co-signers, on the other hand, do not hold ownership of the property and must be qualified military members or spouses. They are individuals who guarantee a home loan. If the homeowner defaults on the debt, the lender will hold both the homeowner and the co-signer responsible.

The VA does not expressly prohibit non-spousal co-borrowers. Acceptable co-borrowers include a Veteran and non-Veteran spouse, two married Veterans where only one Veteran uses their entitlement, two married Veterans where both use their entitlement, and two non-married Veterans where both use their entitlement. The VA also allows what is known as a joint VA loan, where the Veteran applies with a non-Veteran, non-spouse.

Co-signers and co-borrowers can help veterans qualify for a VA home loan. However, a co-signer with poor credit or weak finances could cause a VA loan application to be denied. To receive the maximum benefits of a VA loan, a co-signer should be a spouse or eligible veteran who lives in the home.

To qualify for a VA loan as a veteran or service member, one must have served at least 90 consecutive days of active-duty service during wartime, 181 days of active-duty service during peacetime, or six years in the National Guard.

VA loan eligibility

VA loans are available to veterans, active-duty service members, and, in certain circumstances, spouses and other family members. To be eligible for a VA loan, applicants must meet the minimum service requirements set by the Department of Veterans Affairs (VA), have a valid Certificate of Eligibility (COE), and satisfy the lender's credit and income requirements.

The VA allows a maximum of four borrowers on any loan, and every applicant must meet the VA's and lender's requirements. Acceptable co-borrowers include a veteran and non-veteran spouse, two married veterans where only one veteran uses their entitlement, and two non-married veterans where both use their entitlement. The VA also permits joint VA loans, where the veteran applies with a non-veteran, non-spouse. In this case, the co-borrower must be a qualified veteran or current service member.

To obtain a COE, applicants must provide their social security number and date of birth to their lender, who can typically pull the certificate electronically. The COE confirms that the applicant qualifies for VA loan benefits based on their service history and duty status. For a VA-backed home loan, applicants must also meet the lender's credit and income loan requirements.

Surviving spouses of veterans are also eligible for VA loans but must obtain a COE by filling out specific forms and providing documentation such as the veteran's death certificate and separation paperwork. Additionally, if a veteran has not received a dishonourable discharge and has served for at least 90 continuous days, they may be eligible for a VA loan.

Joint VA loans

A joint VA loan is when two or more borrowers apply for a VA loan, with at least one VA-approved borrower and one non-military borrower. The VA typically allows a maximum of four borrowers on any loan.

The most common scenario for a joint VA loan is for a veteran to apply with their spouse. Married couples are counted as one entity for VA loans, and the VA does not require a down payment for these loans. In this case, both spouses will be responsible for repaying the loan and can choose to count both their incomes when applying. When acting as a co-signer, the spouse's income is not used to qualify for the loan but for liability purposes.

If the co-borrower is not a spouse, they may be required to make a down payment on their portion of the loan. Acceptable co-borrowers in this case include a veteran and non-veteran spouse, two married veterans where only one veteran uses their entitlement, two married veterans where both use their entitlement, and two non-married veterans where both use their entitlement. A non-veteran spouse or eligible veteran on the loan does not trigger any down payment requirements.

In addition, a veteran can take out a loan with a non-veteran, non-spouse co-borrower, such as a brother, father, or unmarried partner. In this case, the veteran must be the primary borrower and meet the VA's credit underwriting guidelines. Any person with a good credit report can join a veteran in using their VA benefits, either as a co-borrower or co-owner of the home.

Non-occupant co-borrowers

VA loans allow veterans to have a co-borrower or co-signer. Co-borrowers on VA loans must meet the same financial requirements as other loan applicants, including minimum credit score, debt-to-income ratio, and more. The VA typically allows a maximum of four borrowers on any loan.

The VA does not expressly prohibit non-spousal co-borrowers. However, in these cases, the VA will only guarantee the eligible borrower's portion of the home loan. This means that a chunk of the mortgage will not have the government backing that the program relies upon.

Joint VA loans are possible for veterans and non-spouse, non-veteran co-borrowers. For example, a veteran can take out a joint VA loan with their brother, parent, or unmarried partner. In these cases, the nonmilitary co-borrower may be required to make a down payment on their portion of the loan.

Frequently asked questions