What Is a Joint VA Loan and Who Can Apply?

A VA loan benefits eligible service members, veterans, and surviving spouses in achieving homeownership. While many are familiar with individual VA loans, a “joint VA loan” offers a specific pathway for multiple individuals to finance a home together. This type of loan can accommodate various borrower scenarios, including those involving non-veterans, allowing a broader range of individuals to leverage the advantages of VA financing.

Defining Joint VA Loans

A joint VA loan is a mortgage where at least one borrower is a VA-eligible veteran, and one or more other individuals are included on the loan application. This structure differs from a standard VA loan, which typically involves a single eligible veteran or a veteran with their spouse.

There are several common scenarios for joint VA loans. One involves two or more VA-eligible veterans who are not married to each other, where both individuals utilize their VA entitlement. Another scenario includes a veteran and their non-veteran spouse; however, loans to a veteran and their spouse are usually not considered a “joint loan” in the same way, as married couples are often treated as one entity for VA loan purposes, even if only one spouse has military service.

The most distinct joint VA loan scenario involves a veteran co-borrowing with an unmarried partner, a family member, or another non-veteran who is not their spouse. This setup allows for the combination of incomes and shared financial responsibility, potentially increasing the overall buying power for the property.

Who Can Apply

For the veteran borrower, general VA eligibility requires meeting service length criteria, such as 90 consecutive days of active service during wartime, 181 days during peacetime, or six years in the National Guard or Reserves.

For a non-veteran spouse co-borrowing with a veteran, their income and creditworthiness are assessed by lenders for loan approval. This ensures that the combined financial profile supports the mortgage obligation.

When an unmarried or other non-veteran co-borrows with a veteran, the requirements become more specific. Lenders will typically require the non-veteran to qualify for their share of the loan based on conventional lending standards, which can involve stricter credit and debt-to-income (DTI) ratio requirements for that specific portion. Additionally, any joint loan where a veteran holds title to the property with someone other than their spouse typically requires prior approval from the VA.

Beyond the specific borrower types, all applicants on a joint VA loan must meet general lending criteria. While the VA does not set a minimum credit score, most lenders typically look for a FICO score of 620 or higher, though some may approve loans with lower scores. All borrowers must demonstrate stable income and acceptable debt-to-income ratios, with lenders generally preferring a DTI of 41% or less, though exceptions may be made.

Key Financial Differences

One notable aspect is the VA funding fee, a one-time charge paid to the Department of Veterans Affairs. This fee, which can range from 0.5% to 3.3% of the loan amount, varies based on factors such as the loan type, whether the veteran has used their VA loan benefit previously, and the amount of any down payment. For joint VA loans that include a non-veteran (unmarried or other non-spouse), the funding fee generally applies to the entire loan amount, calculated based on the veteran’s share of the loan obligation. Exemptions from the funding fee are available for certain individuals, including veterans receiving compensation for service-connected disabilities, Purple Heart recipients, and eligible surviving spouses. If two veterans are on the loan and one is exempt, the total funding fee may be reduced.

The utilization of VA entitlement also varies in joint loan scenarios. When multiple veterans are on a joint loan and both use their entitlement, the VA typically divides the entitlement charge, usually equally, unless a written agreement specifies otherwise. It is important to recognize that using entitlement on a joint loan can affect a veteran’s ability to secure future VA loans, as the entitlement is a lifetime benefit that can be used multiple times but may be tied up by an existing loan.

A significant financial detail is the shared loan liability. All individuals listed on a joint VA loan are equally responsible for the entire mortgage amount. This means that regardless of their individual contribution or VA eligibility status, each borrower is fully accountable for the total loan obligation.

Furthermore, down payment requirements can differ in joint VA loan situations. When an unmarried non-veteran co-borrows, a down payment might be necessary for the portion of the loan not guaranteed by the VA.

This is because the VA’s guarantee typically covers only the veteran’s share of the loan, leading lenders to require a down payment to mitigate risk on the non-guaranteed portion.

The Application Process

Applying for a joint VA loan involves several steps, beginning with thorough preparation. All borrowers will need to gather essential documents to demonstrate their financial standing and eligibility. This typically includes government-issued identification, recent pay stubs, two years of tax returns and W-2 statements, and bank statements for checking and savings accounts. The veteran borrower specifically needs their Certificate of Eligibility (COE) to confirm their VA home loan benefit. Depending on individual circumstances, additional documents such as a DD-214, VA disability awards letters, or divorce decrees may also be required.

Once the necessary documentation is compiled, it is advisable to seek out lenders with experience in VA loans, particularly joint arrangements, as not all lenders offer every type of joint VA loan. Obtaining a pre-approval from a chosen lender is a beneficial step, providing an understanding of the potential borrowing capacity and streamlining the subsequent home search. Lenders often use automated underwriting systems to quickly assess a borrower’s eligibility for pre-approval.

After gathering documents and securing pre-approval, the formal application package is submitted to the chosen lender. The loan then enters the underwriting phase, where the lender’s underwriter meticulously reviews all submitted documents, verifying financial information, credit history, income stability, and debt-to-income ratios to determine the borrowers’ ability to repay the loan. This comprehensive review process can take several weeks to complete. Concurrently, a VA-approved appraisal is conducted to ensure the home’s value aligns with the loan amount, and the property must meet the VA’s Minimum Property Requirements.

Upon successful completion of underwriting and appraisal, the final steps involve signing the closing documents and funding the loan, transferring ownership of the home.