VA loans make homeownership more accessible for Veterans by minimizing costs like down payments and PMI. Still, some Veterans face hurdles qualifying on their own, whether due to lower credit scores or insufficient income.
That’s where co-borrowers and co-signers come into play, providing added financial stability and helping you secure the home you want.
This article breaks down the differences between co-borrowers and co-signers, explains how both roles work within the VA loan framework, and guides you through potential benefits, risks, and important steps.
With this knowledge, you’ll be empowered to make an informed decision about your homebuying journey.
In this Article
What is a Co-Borrower?
A co-borrower on a VA home loan is someone who applies for the mortgage with you, appears on the property’s title, and shares full legal responsibility for repaying the loan. Typically, a spouse or another Veteran is the most common type of co-borrower. Both individuals’ incomes, credit scores, and debt obligations are combined during the lender’s qualification process, which can help meet income or credit requirements more easily.
For example, if you earn around $3,000 per month and have difficulty qualifying for a higher-priced home in a competitive housing market, adding a co-borrower who earns an additional $2,000 per month could significantly raise your overall borrowing limit. This might mean qualifying for a loan of up to $450,000, with a monthly mortgage payment of about $1,500 (depending on interest rates and other factors), instead of being capped closer to $300,000 on your own.
Because a co-borrower is also on the deed, you and your co-borrower jointly own the home. Both of you share the same level of legal liability for the mortgage, including making payments on time and fulfilling any lender or VA requirements.
What About VA Loan Co-Signers?
A co-signer is an individual who signs the loan documents along with you but does not hold an ownership stake in the property. In other words, a co-signer agrees to be responsible for the loan should you fail to make payments, but they are not listed on the deed or title. Unlike co-borrowers, co-signers do not get to occupy or claim ownership of the home.
Often, this arrangement can be helpful if you have sufficient personal funds for the monthly mortgage payment but lack the credit history or debt-to-income (DTI) ratio required for full approval. For instance, a co-signer (such as a parent) with a strong credit history and a higher monthly income can help you qualify for a loan amount that might otherwise be out of reach.
Keep in mind that the co-signer’s credit and financial situation also undergoes evaluation. Their debts and credit score will affect your final qualification. For example, if your father has a monthly income of $4,000 and a credit score of 700, he can bolster your loan application even though he won’t be living in the home.
Why Use a Co-Borrower or Co-Signer?
Securing a VA loan is often more accessible for Veterans than a conventional mortgage, thanks to features like zero down payment and no private mortgage insurance (PMI). Still, your personal income or credit score may fall below what’s required to qualify for a home in your desired price range. In these cases, leveraging someone else’s income or credit profile can open new possibilities.
- Higher Loan Amounts: Combine incomes to potentially qualify for a more expensive property. This can be a lifesaver in areas with higher median home prices, such as near Military bases or popular urban neighborhoods.
- Credit Score Boost: If your credit score is borderline (e.g., hovering around 620), adding someone with a stronger credit history can improve your approval chances and possibly lead to a better interest rate.
- Lower Debt-to-Income Ratio: Lenders calculate your total debt payments as a percentage of your total monthly income. Including a co-borrower or co-signer’s income in that equation can reduce your DTI, making it easier to qualify.
Ultimately, using a co-borrower or co-signer can mean the difference between settling for a smaller home versus comfortably affording the property you want in a competitive real estate market.
Who Can Be a VA Loan Co-Borrower?
While exact guidelines can vary by lender, the VA allows several types of co-borrowers:
- Spouses: This is the most common co-borrower scenario. Since spouses typically share finances and long-term goals, combining incomes makes sense. For instance, if your monthly income is $3,000 and your spouse’s is $2,000, your lender will view a combined income of $5,000.
- Another Veteran: You can co-borrow with another Veteran who has available entitlement. When two Veterans co-borrow, each may use part of their entitlement, creating the potential for an even higher loan amount. However, co-ownership responsibilities and entitlement usage should be carefully planned, especially if you intend to purchase another home using your VA benefits later.
- Non-Veteran Partners: An unmarried partner or close friend may co-borrow on a VA loan in certain cases, though restrictions can be more stringent compared to a spouse. If the non-Veteran co-borrower does not have VA entitlement, it may affect certain parts of the loan structure, but it can still be an effective way to combine incomes.
All co-borrowers must meet the lender’s credit score thresholds and demonstrate stable income. It’s also important to note that if the co-borrower is not a spouse or another Veteran, the Veteran borrower’s entitlement may still cover 100% of the loan. Requirements can vary by lender, so always verify individual policies.
Who Can Be a VA Loan Co-Signer?
Co-signers on a VA loan generally include parents, siblings, or other close relatives and friends who are ready to support your application but do not intend to live in the property. Here are some considerations:
- Relationship and Ties: Lenders typically prefer co-signers who have a clear and established relationship with the borrower (e.g., family members). Casual acquaintances rarely qualify.
- Credit and Debt Profile: A co-signer’s monthly debts—like car loans or credit card balances—will count against the total household DTI. If your co-signer carries a high debt load, it can offset the benefit of adding their income. Use our DTI calculator to figure out your debt-to-income ratio.
- No Ownership Rights: Because co-signers do not appear on the home’s title, they won’t build equity or have any direct claim to the property, but they are legally responsible if you cannot make payments.
In short, a supportive parent or adult child may step in as a co-signer to help strengthen your loan application without taking on direct ownership. This arrangement can ease your financial burden, but it also places a significant financial obligation on your co-signer.
How Co-Borrowers and Co-Signers Help
Both co-borrowers and co-signers can significantly boost a Veteran’s chances of getting approved for a VA loan in multiple ways.
1. Boosting Income
Income is one of the biggest factors in determining how much house you can afford. Lenders evaluate whether your total monthly income is high enough to comfortably cover your mortgage payment and other debts. Combining incomes with a co-borrower or adding a co-signer’s earnings can help you qualify for a larger loan. For example, if your monthly income is $3,000, adding a co-borrower or co-signer who makes $2,000 could help you move from a $300,000 property limit to something closer to $450,000.
2. Improving Credit Strength
Your credit score plays a key role in securing a favorable interest rate. If your score is at the lower end of eligibility, even a slight bump to your interest rate can mean higher monthly payments. A co-borrower or co-signer with a stronger credit score can bolster your overall application. Some lenders weigh scores differently, but in many cases, the average or “representative” score from the group of applicants can determine the final rate.
3. Lowering Debt-to-Income (DTI) Ratio
The VA often uses a residual income test, but lenders also look closely at your DTI ratio, which compares monthly debts (including the new mortgage) to your gross monthly income. If your existing debts push your DTI too high, adding a co-borrower or co-signer with minimal debts and additional income can bring that ratio down and make qualification more likely.
Risks of VA Loan Co-Borrowers and Co-Signers
While leveraging someone else’s income or credit can be advantageous, there are potential pitfalls that both you and your co-borrower or co-signer should carefully consider:
- Shared Liability: Any late or missed payments will negatively impact both you and your co-borrower/co-signer’s credit scores. In extreme cases, default can lead to serious credit damage for everyone involved.
- Entitlement Tie-Up (for Veteran Co-Borrowers): When two Veterans co-borrow using VA entitlements, the portion of entitlement each uses will remain tied up in that home until the loan is paid off or refinanced. This can limit future VA home purchases if you want to use your benefits again.
- Co-Signer Debt Impact: A co-signer’s existing debt can push up the total DTI if their liabilities are large. If their debt outweighs the benefit of their additional income, the co-signing arrangement could become more of a hindrance than a help.
- Personal Relationship Strains: Money matters can strain even the closest relationships. Be sure to discuss and document each party’s roles, responsibilities, and contingency plans before signing.
Always have open and honest conversations about expectations. A clear agreement, possibly with legal counsel if needed, can help preserve relationships and safeguard everyone’s financial well-being.
VA Loan Rules for Co-Borrowers and Co-Signers
The Department of Veterans Affairs and individual lenders each set specific guidelines regarding eligibility, creditworthiness, and occupancy:
- Occupancy: Generally, the Veteran or their spouse must intend to live in the property as their primary residence according to the VA occupancy guidelines. If you add a co-borrower who is not your spouse, that person is typically expected to occupy the home as well—unless they are another Veteran. Co-signers, however, do not need to occupy the property.
- Entitlement Usage: A Veteran’s entitlement is used to guarantee a portion of the loan. If you co-borrow with another Veteran, each of you can use your entitlement. A non-Veteran co-signer does not tap into their own entitlement because they do not have it. That means your own entitlement remains fully in play.
- Credit Requirements: The VA itself does not set a specific minimum credit score, but most lenders require a credit score around 620 for a VA loan. If you or your co-borrower/co-signer have significant credit issues, your interest rate or approval chances may be affected. Read our article on how to get a VA loan with poor credit.
- Residual Income: The VA focuses on residual income, which is the amount left after essential expenses. Adding a co-borrower or co-signer can improve residual income, but lenders will still examine everyone’s debts.
It’s always wise to double-check any additional lender-specific rules. Some lenders have overlay requirements that go beyond VA guidelines, such as higher minimum credit scores for co-borrowers or stricter DTI ratios when a co-signer is involved.
Table 1: Co-Borrower vs. Co-Signer Snapshot
| Role | On Deed? | Liable? | Income Counts? | Entitlement Used? | Example Payment ($400K at ~5.5%) |
|---|---|---|---|---|---|
| Co-Borrower | Yes | Yes | Yes | Yes (if also a Veteran) | Approx. $1,400/mo |
| Co-Signer | No | Yes | Yes | No | Approx. $1,400/mo |
This table offers a quick at-a-glance comparison. Note that the actual monthly payment depends on interest rates, loan terms, and any additional considerations like taxes and insurance.
How to Add a Co-Borrower or Co-Signer
If you decide to move forward with a co-borrower or co-signer, the process is similar to any VA loan application, but you’ll need additional documentation from the second applicant. Here’s a general step-by-step approach:
- Obtain Your Certificate of Eligibility (COE): Go to VA.gov to request your COE. This document confirms your eligibility for a VA-backed mortgage.
- Select a Lender: Look for lenders experienced with VA loans and confirm they allow co-borrowers or co-signers in the manner you intend.
- Combine Documentation: Both you and your co-borrower/co-signer need to provide pay stubs, tax returns, and bank statements. If the co-signer is a parent, for instance, their proof of income must be verifiable.
- Undergo Credit Checks: Expect credit pulls on both parties. If one of you has any outstanding debt or lower credit scores, be prepared to address questions from the lender.
- Finalize the Loan Terms: Once approved, lock in your interest rate and complete the underwriting steps. Ensure both parties understand their legal obligations before signing.
Typically, the entire process—finding a lender, collecting paperwork, getting approved, and closing on the home—takes 30 to 60 days. Having a co-borrower or co-signer could lengthen or shorten the timeline depending on how quickly documents are provided.
Income Impact Examples
| Scenario | Veteran Income | Co-Borrower/Co-Signer Income | Total Income | Approx. Max Loan | Est. Monthly Payment (at ~5.5%) |
|---|---|---|---|---|---|
| Vet Alone | $3K/mo | $0 | $3K/mo | $300K | $1,050/mo |
| With Co-Borrower | $3K/mo | $2K/mo | $5K/mo | $450K | $1,500/mo |
| With Co-Signer | $3K/mo | $3K/mo | $6K/mo | $500K | $1,750/mo |
These figures are estimates and can vary based on credit scores, down payment (if any), regional factors like property taxes, and homeowner’s insurance. Still, the chart highlights how critical it can be for some Veterans to add a co-borrower or co-signer to reach a higher loan limit.
Why VA Loans with Co-Borrowers Beat Conventional
Even if you add a co-borrower or co-signer, VA loans generally offer more favorable terms compared to conventional mortgages. Veterans often enjoy:
- Zero Down Payment: Conventional loans might require 5% to 20% down, potentially tying up thousands of dollars that could otherwise go toward moving costs, emergency funds, or home improvements.
- No Private Mortgage Insurance (PMI): Conventional mortgages usually require PMI when you put less than 20% down. VA loans skip PMI, which can save you hundreds of dollars per month.
- Flexible Credit Requirements: VA loans are known for being more forgiving of lower credit scores compared to many conventional loans.
- Competitive Interest Rates: The VA backing often leads to lower interest rates overall, saving you money throughout the life of your loan.
For example, on a $400,000 loan, a conventional mortgage could come with a 7% interest rate plus PMI—potentially pushing your monthly payment to around $1,660 plus an additional PMI cost. By contrast, a VA loan at 5.5% interest and no PMI might land closer to $1,400 per month, resulting in significant long-term savings.
Real Veteran Co-Borrower and Co-Signer Wins
Wondering whether the co-borrower or co-signer path is genuinely helpful? Check out these real-world examples:
- $400K Purchase with Spouse Co-Borrower: A Veteran stationed near Joint Base San Antonio sought a property in Alamo Heights. Alone, he qualified for only $300K. With his spouse adding $2,000 in monthly income, their combined qualification jumped to $400K, and they snagged a $1,400/mo payment.
- $450K Purchase with Parent as Co-Signer: Another Veteran needed additional credit strength. His mother’s excellent credit score plus $3,000 monthly income helped him qualify for a $450K home at about $1,500 per month. His mother stayed in a different city but shared liability on the loan.
- $350K Purchase with Another Veteran: Two friends who served together both had separate VA entitlements. By pooling their benefits, they easily secured a home near a local Military installation. Their total monthly payment for a $350K property landed around $1,200, which they split.
These scenarios demonstrate how adding a co-borrower or co-signer can directly translate to homeownership success for Veterans, allowing them to purchase homes that would otherwise be out of reach.
Why 2025’s Your Year
Real estate trends suggest continued moderate price growth through 2025, making this a strategic time for Veterans to enter the housing market. If you’re worried about rising property values, securing a home sooner could give you a head start on building equity. Some experts predict that certain Military town hotspots may see property value increases of up to 5% annually.
If you wait, you may find yourself paying more for the same home. Locking in a VA loan rate in 2025—especially if market rates remain relatively stable—can save you thousands in interest over the lifetime of your mortgage. With the help of a co-borrower or co-signer, you might qualify for a higher-priced property in a sought-after neighborhood, positioning yourself for even greater gains as local property values appreciate.
Pitfalls to Avoid
Even with all these advantages, it’s important to go in with eyes wide open. Here are a few pitfalls to watch out for:
- Unexpected Co-Borrower Departure: Life changes can happen—such as divorce, relocation, or illness—and leave you carrying the full mortgage payment on your own.
- Damaged Credit: Missed or late payments affect everyone on the loan. A single slip could lower both your and your co-borrower/co-signer’s credit scores.
- Entitlement Limitations: If you want to buy another home using a VA loan in the future, shared entitlement may restrict how much is available for your next purchase.
- Inadequate Communication: Not discussing roles, expectations, and “what if” scenarios can cause misunderstandings later.
Avoiding these pitfalls primarily comes down to thorough planning, open communication, and a solid understanding of your shared responsibilities.
Your VA Loan Co-Borrower Plan
If you think a co-borrower or co-signer might be the right solution, here’s a simple plan to help you get started:
- Evaluate Your Finances: Determine how much you can afford on your own, and identify any gaps that a co-borrower or co-signer could fill.
- Discuss with Potential Partners: Talk to your spouse, another Veteran, or a trusted family member about your goals and see if they’re willing to share financial responsibility.
- Secure Your COE: Visit VA.gov to obtain your Certificate of Eligibility. This is essential for any VA home loan.
- Contact VA-Savvy Lenders: Seek lenders who specialize in VA financing and are comfortable handling co-borrower or co-signer arrangements.
- Gather Documentation: You’ll need employment records, tax returns, bank statements, and proof of Military service. Your co-borrower or co-signer must provide similar documents.
- Apply and Lock Your Rate: Once approved, lock your interest rate. Review the loan estimate thoroughly, ensuring both parties understand monthly payments, fees, and obligations.
- Close on Your New Home: Sign the final documents, finalize the title, and prepare for homeownership. Make sure your co-borrower or co-signer has copies of all relevant paperwork.
Following these steps with a clear game plan sets you up for a smooth VA loan closing and a secure future in your new home.
FAQs About The Complete Guide to VA Loan Co-Borrowers and Co-Signers
Does the co-borrower need to be a Veteran?
Generally, no. The main requirement is that at least one borrower is a Veteran with the valid VA entitlement. Non-Veteran co-borrowers are allowed, but the Veteran must be involved in the loan and occupy the property as a primary residence (unless the co-borrower is the Veteran’s spouse).
Who can be a co-borrower on a VA loan?
A co-borrower is often a spouse or another Veteran, though certain lenders allow non-Veteran partners or close relatives. Every co-borrower must meet the lender’s credit and income guidelines.
Does it matter who is borrower vs. co-borrower?
Yes. Both individuals share responsibility for the loan, but the Veteran usually serves as the primary borrower to ensure full VA eligibility. The lender evaluates both applicants’ credit, income, and debts, which can boost the overall approval chances.
If the co-borrower is a Veteran but the borrower is not, can you still get a VA loan?
The VA typically requires the Veteran to be an occupying borrower or co-borrower. If a non-Veteran is listed as the main borrower, you’ll generally lose access to VA benefits. The Veteran’s name, entitlement, and occupancy must be tied directly to the loan.
What is the borrower/co-borrower rule?
Essentially, whoever is on the loan is fully liable for payments. If two Veterans co-borrow, they may each use part of their entitlement. If one borrower is a non-Veteran, the Veteran’s entitlement covers the loan while both share legal responsibility for monthly payments.
How does sharing entitlement work for two Veterans?
When two Veterans co-borrow, each may apply a portion of their entitlement. This can be advantageous if both have benefits available, potentially leading to a higher loan limit—though it also ties up each Veteran’s entitlement.
Do both borrower and co-borrower need to live in the home?
The Veteran or their spouse must occupy the home as a primary residence. If the co-borrower is another Veteran or spouse, they typically also occupy the property. However, a non-resident co-borrower could be allowed if at least the Veteran (or spouse) lives there, depending on lender policies.
Does being co-borrower vs. co-signer change the rules?
Yes. A co-borrower shares ownership and liability; a co-signer only shares liability and does not appear on the property’s title. VA guidelines often differ for co-signers, so check with your lender to ensure you use the right approach for your specific scenario.
