Can My Son Use My VA Home Loan?

A VA home loan is a benefit designed to assist service members, veterans, and certain eligible spouses in achieving homeownership. Many families wonder if this benefit can extend to their non-veteran children for purchasing a home. This article explores VA home loan benefits and how they apply to family members.

Eligibility for VA Home Loans

Eligibility for a VA home loan is determined by an individual’s military service. Active-duty service members need to have served for at least 90 continuous days during wartime or 181 days during peacetime. Veterans must meet minimum service requirements, which vary by service era, requiring 24 continuous months or the entire period for which they were called to active duty if served between August 2, 1990, and the present. Members of the National Guard and Reserves qualify with six years of service or 90 days of active-duty service, with at least 30 consecutive days under Title 32 orders.

A Certificate of Eligibility (COE) is the document that confirms an individual meets the military service requirements for a VA loan. This document indicates eligibility to lenders and details the available VA loan entitlement, which is the amount the VA will guarantee. While a COE is necessary before closing on a VA loan, the application process can begin without it, as lenders can help obtain it. The COE also provides information regarding the VA Funding Fee exemption status.

Transferring VA Loan Entitlement

A VA loan entitlement cannot be transferred from a veteran to their non-veteran child. VA loan benefits are earned through a veteran’s dedicated service and are intended for the veteran’s personal use or that of their eligible spouse. This benefit is fundamentally tied to the individual who served. There is a limited exception for eligible surviving spouses who may qualify for the benefit if their spouse died in service or from a service-connected disability, or in certain other specific circumstances.

Scenarios for Family Members

While direct transfer of a VA loan entitlement to a non-veteran child is not possible, specific scenarios allow a non-veteran child to be involved in a home purchase related to a VA loan. One common arrangement is a joint VA loan, where a veteran parent co-borrows with a non-veteran child. In such cases, the VA guarantees only the veteran’s portion of the loan, which means the non-veteran co-borrower may need to provide a down payment to cover their share. Both borrowers’ income and credit will be considered by the lender, and both must meet the lender’s financial standards.

Another scenario involves the veteran parent securing the VA loan as the sole borrower, with the non-veteran child residing in the home. The loan and its obligations, including occupancy requirements, remain solely with the veteran parent. A VA loan can also be assumed by a child in certain situations, such as upon the veteran’s death, or if the child meets specific qualifications and the lender approves. This process allows the child to take over the existing mortgage terms, but it does not transfer the VA entitlement itself.