Can a Girlfriend Be on Title on a VA Loan?

Homeownership through a VA loan is a significant benefit for eligible service members and veterans. When considering a VA loan, a common question arises regarding co-borrowers who are not married to the veteran, such as a girlfriend, and their ability to be on the property’s title. While VA loans are designed to assist veterans, specific provisions allow for joint loans with non-veteran, non-spouse co-borrowers. This article explores including a non-married partner on a VA loan and its implications for the loan and property ownership.

Understanding VA Loan Eligibility for Joint Borrowers

VA loans are for eligible veterans, active-duty service members, or certain surviving spouses. When a veteran applies for a VA loan with a non-veteran, non-spouse co-borrower, it is categorized as a “joint VA loan.” This arrangement differs from a loan with a spouse, as married couples are typically treated as one entity for VA loan purposes, even if only one spouse is a veteran.

The VA permits joint loans with non-veteran, non-spouse individuals, but specific conditions apply. Joint loans mean the VA only guarantees the veteran’s portion of the loan. This means the portion of the loan attributable to the non-veteran co-borrower is not covered by the VA guarantee, which can lead to additional requirements from lenders.

For any VA loan, the veteran borrower must meet the occupancy requirement, certifying their intent to occupy the property as their primary residence. Generally, the veteran must move into the home within a “reasonable time,” typically 60 days after closing. All co-borrowers will have their creditworthiness and income assessed by the lender to ensure repayment ability.

Financial Considerations with a Non-Veteran Co-Borrower

Including a non-veteran co-borrower on a VA loan introduces financial considerations, especially regarding the VA Funding Fee. The VA Funding Fee is a one-time fee paid to the VA. While eligible veterans may be exempt from this fee, or it can be financed into the loan, the presence of a non-veteran co-borrower alters this.

For joint VA loans with a non-veteran co-borrower, the portion of the loan attributed to the non-veteran is subject to a cash funding fee at closing. This amount cannot be financed into the loan. The funding fee calculation for such loans allocates the actual loan amount equally between the borrowers for funding fee purposes. For instance, if a non-veteran is a co-borrower, the funding fee percentages would be applied to the veteran’s half of the loan amount.

Lenders will assess the creditworthiness and income of both the veteran and the non-veteran co-borrower to determine loan approval and terms. Both parties on the loan will be equally liable for the entire mortgage debt. Because the VA only guarantees the veteran’s portion, lenders may require a down payment from the non-military borrower on their unguaranteed share of the loan to mitigate risk.

Holding Title to the Property

Beyond the loan itself, the method of holding title to the property is a legal decision with significant implications for ownership rights, potential sale, and inheritance. When unmarried individuals purchase property together, common forms of co-ownership include Joint Tenancy with Right of Survivorship (JTWROS) and Tenants in Common (TIC). These options define how the property is owned and what happens to it if one owner passes away.

Joint Tenancy with Right of Survivorship (JTWROS) means two or more individuals hold equal rights to the property. A defining feature of JTWROS is the “right of survivorship,” where if one joint tenant dies, their share of the property automatically transfers to the surviving tenant(s), bypassing the probate process. JTWROS is chosen by unmarried couples who intend for the surviving partner to inherit the deceased partner’s share automatically.

Tenants in Common (TIC), in contrast, allows two or more people to hold title to real property, with unequal ownership shares. When one tenant in common dies, their interest does not automatically pass to the other co-owners. Instead, the deceased owner’s share becomes part of their estate and is distributed according to their will or state intestacy laws. This form of ownership provides flexibility regarding ownership percentages and allows each owner to sell or transfer their share independently without the consent of the other co-owners. The choice between JTWROS and TIC has substantial legal consequences for property rights and future disposition, independent of the VA loan terms.