That’s where co-borrowers and co-signers come in. These terms are often confused, but they play distinct roles in helping you secure a VA home loan.
In this comprehensive guide, we’ll dive deep into what VA loan co-borrowers and co-signers are, who qualifies, how they impact your loan, and practical steps to make the process smooth.
Whether you’re teaming up with a spouse, another veteran, or a non-spouse for a joint VA loan, this guide will equip you with everything you need to achieve homeownership.
In this Article
What Are VA Loan Co-Borrowers and Co-Signers?
A VA loan co-borrower or co-signer is someone who shares financial responsibility for the mortgage, leveraging their income, credit, and assets to strengthen your application. The key difference lies in ownership and occupancy:
- Co-Borrower: Lives in the home, has ownership interest, and is equally responsible for loan payments.
- Co-Signer: Doesn’t live in or own the property but guarantees the loan, sharing liability if payments are missed.
The Department of Veterans Affairs (VA) has strict eligibility rules, limiting both roles to VA-eligible veterans, active-duty service members, or spouses. Non-veteran, non-spouse individuals can participate in joint VA loans as co-borrowers, which we’ll explore later. Understanding these distinctions early saves time and prevents missteps.
For official VA loan eligibility details, visit the VA’s home loan page.
Key Differences Between Co-Borrowers, Co-Signers, and Joint VA Loans
To clarify the roles, here’s a detailed comparison:
| Aspect | Co-Borrower | Co-Signer | Joint VA Loan |
|---|---|---|---|
| Ownership Interest | Has ownership in the property | No ownership in the property | Shared ownership (veteran and non-veteran) |
| Residency | Lives in the home | Does not live in the home | Lives in the home |
| Financial Responsibility | Equally responsible for payments | Equally responsible for payments | Equally responsible for payments |
| VA Eligibility | Veteran or spouse | Veteran or spouse | Veteran and non-veteran, non-spouse |
| VA Guaranty | Covers full loan (if both VA-eligible) | Covers full loan (if VA-eligible) | Covers only veteran’s portion |
| Down Payment | Usually $0 | Usually $0 | Often required for non-guaranteed portion |
The VA’s rules mean only veterans, active-duty members, or their spouses can typically be co-borrowers or co-signers. Joint VA loans allow non-veteran, non-spouse co-borrowers, but only the veteran’s portion is VA-guaranteed, often requiring a down payment.
Who Can Be a Co-Borrower on a VA Loan?
A co-borrower shares ownership and lives in the home. Eligible co-borrowers include:
- Spouse (veteran or non-veteran): Must occupy the home and share ownership.
- Another VA-eligible veteran: Must use their VA loan entitlement and live in the home.
- Non-spouse, non-veteran (joint VA loan): Must live in the home, but the VA only guarantees the veteran’s portion, often requiring a down payment.
For example, if you’re a veteran with a modest income, your spouse’s earnings can boost your loan eligibility, allowing you to qualify for a larger mortgage. However, their debts count toward your debt-to-income (DTI) ratio, which could complicate approval if their debt load is high.
VA Loan with a Non-Spouse: What You Need to Know
A VA loan with a non-spouse, such as a sibling, parent, or unmarried partner, is possible through a joint VA loan. Unlike standard VA loans, only the veteran’s portion is guaranteed, often requiring a down payment for the non-veteran’s share. Both parties must live in the home and meet credit and DTI requirements. For example, a veteran and their brother buying a $300,000 home might need a 12.5% down payment ($18,750) on the brother’s $150,000 portion.
Learn more about VA loan requirements at the VA’s loan guaranty service.
Who Can Be a Co-Signer on a VA Loan?
Wondering who can co sign a VA loan? Only VA-eligible veterans, active-duty service members, or spouses qualify. Co-signers don’t live in or own the property but are equally responsible for payments. For instance, if you’re a young veteran with limited credit history, a VA-eligible parent with a 720 credit score and $70,000 income could co-sign to strengthen your application. Their credit and income help, but they’re liable if you default, and their DTI is included in calculations.
Why Use a Co-Borrower or Co-Signer?
Adding a co-borrower or co-signer can improve your loan prospects:
- Easier qualification: Their financial profile offsets weaknesses in yours.
- Larger loan amounts: Combined income may qualify you for a bigger mortgage.
- Lower interest rates: A stronger application could secure better terms.
- Support for first-time buyers: Co-signers help veterans with thin credit files.
However, their debts increase your DTI, and missed payments affect everyone’s credit. Co-borrowers must live in the home, limiting flexibility.
VA Loan Entitlement and Co-Borrowers
VA loans include an entitlement—the portion the VA guarantees (typically 25% of the loan). When two veterans co-borrow, both use their entitlement, affecting future VA loan usage. Here’s how it works:
| Scenario | Entitlement Impact |
|---|---|
| Veteran + Non-Veteran Spouse | Only the veteran’s entitlement is used. |
| Two Veterans | Both veterans use their entitlement. |
| Veteran + Non-Veteran, Non-Spouse (Joint VA Loan) | Only the veteran’s entitlement is guaranteed; down payment often required. |
If a veteran has used part of their entitlement previously, it reduces the available amount. Check your entitlement via the VA’s eBenefits portal.
Joint VA Loans: A Deeper Dive
Joint VA loans allow a veteran to apply with a non-veteran, non-spouse co-borrower (e.g., sibling, parent, or partner). The VA guarantees only the veteran’s portion—typically half the loan. Key aspects include:
- Down payment: Often 12.5% of the non-veteran’s portion to cover the non-guaranteed share.
- Financial scrutiny: The non-veteran’s credit and DTI face the same requirements.
- Occupancy: Both parties must live in the home and share ownership.
For a $400,000 home, the VA might guarantee $50,000 (25% of the veteran’s $200,000 share), requiring a $25,000 down payment on the non-veteran’s portion.
Joint VA Loan vs. Standard VA Loan
| Feature | Joint VA Loan | Standard VA Loan |
|---|---|---|
| Eligible Borrowers | Veteran + non-veteran, non-spouse | Veteran, spouse, or another veteran |
| VA Guaranty | Covers veteran’s portion only | Covers full loan amount |
| Down Payment | Often 12.5% of non-veteran’s portion | Typically $0 |
| Occupancy | Both must live in the home | Co-borrowers must live in the home |
| Common Use Case | Veteran with sibling or partner | Veteran with spouse or another veteran |
Joint VA Loan Requirements
To qualify for a joint VA loan:
- The veteran must have sufficient entitlement.
- Both borrowers must occupy the home.
- The non-veteran’s financials (credit, DTI, income) must meet lender standards.
- A down payment (typically 12.5%) is often required for the non-guaranteed portion.
- Lenders may require additional documentation to verify the non-veteran’s stability.
VA Loan Co-Borrower Requirements: A Complete Breakdown
Co-borrowers on a VA loan must meet specific criteria:
- Eligibility: Must be a veteran, active-duty member, or spouse (non-veteran, non-spouse for joint VA loans).
- Occupancy: Co-borrowers must live in the home, except in rare non-occupant spouse cases.
- Financials: Meet lender standards for credit (typically 620–660), DTI (preferably under 41%), and stable income.
- Entitlement: Veterans use their VA entitlement; non-veterans trigger partial guaranty in joint loans.
Lenders may cap co-borrowers at four, and all financial profiles are scrutinized.
How Co-Borrowers and Co-Signers Affect Your Application
Lenders assess the combined financial profile:
- Income: Total income increases borrowing power but must be stable.
- Credit Scores: The lowest score often influences approval and rates (VA minimum: 620–660).
- DTI Ratio: All borrowers’ debts are included, ideally under 41%.
- Assets: Combined savings strengthen approval odds.
If your co-borrower has a 700 credit score but $1,500 in monthly debt, their DTI could complicate approval. Open financial discussions are critical.
Risks and Considerations
Consider these risks:
- Shared liability: Missed payments damage everyone’s credit.
- Entitlement tie-up: Veterans’ entitlements are locked until the loan is paid or refinanced.
- Relationship risks: Financial disputes can strain ties. I’ve seen friends clash over payment disagreements—plan ahead.
- Down payment for joint loans: Non-veteran co-borrowers often trigger down payment requirements.
How to Apply with a Co-Borrower or Co-Signer
- Verify eligibility: Ensure all parties meet VA and lender requirements.
- Collect documents: Gather pay stubs, tax returns, bank statements, and credit reports.
- Choose a VA-approved lender: Lenders like Veterans United handle complex scenarios.
- Apply for your Certificate of Eligibility (COE): Obtain it via the VA’s COE portal.
- Submit the application: Include all financial details.
- Review and close: Check loan terms, especially payment and ownership splits.
Common VA Loan Co-Borrowing Scenarios
Dual Military VA Home Loan: Combining Entitlements
A dual military VA home loan involves two VA-eligible veterans (married or unmarried) combining their entitlements. For a $600,000 home, each might use $75,000 of entitlement (25% of $300,000 each), avoiding a down payment. Alternatively, one veteran can use their full entitlement, preserving the other’s for future use. Both must live in the home and share payment responsibility.
Other scenarios include:
- Veteran and Non-Veteran Spouse: A veteran and spouse apply for a $450,000 home. The spouse’s $60,000 income helps, but their $800/month car loan increases DTI. They secure a $0 down loan.
- Two VA-Eligible Veterans: Two veterans buy a $500,000 home, splitting entitlement ($62,500 each). They share payments and maintenance costs.
- Veteran with Parent Co-Signer: A parent co-signs, boosting approval for a $350,000 loan without living in the home.
- Joint VA Loan with Non-Veteran Partner: A veteran and partner buy a $400,000 home, with a $25,000 down payment on the partner’s portion.
- Non-Occupant Spouse: A veteran relocates, but their spouse stays elsewhere temporarily. The loan is approved if the veteran occupies the home.
VA Refinancing with Co-Borrowers
Refinancing can be complex. If a veteran and non-veteran spouse divorce, the spouse cannot refinance into a VA loan alone, as they lack entitlement. The veteran must refinance (e.g., via an IRRRL) to remove the spouse or switch to a conventional loan. Learn more at the VA’s IRRRL page.
FAQs About VA Loan Co-Borrowers and Co-Signers
Can a non-veteran co-sign a VA loan?
Only a veteran’s spouse or another VA-eligible person can co-sign. Non-veteran, non-spouse co-signers aren’t allowed, though they can co-borrow in a joint VA loan, often requiring a down payment.
Can you have a co-signer on a VA loan?
Yes, you can have a co-signer on a VA loan, but they must be a VA-eligible veteran or your spouse. Co-signers don’t live in or own the home but are liable for payments. Their credit and income strengthen your application, but their debts affect the DTI ratio.
Can my spouse use my VA loan without me?
No, your spouse cannot use your VA loan without you, as the loan relies on your VA entitlement. They can co-borrow if they live in the home, but you must be on the loan. In cases like divorce, refinancing to remove you requires switching to a non-VA loan.
Can a co-borrower be removed from a VA loan?
Yes, through refinancing (e.g., IRRRL) or paying off the loan. The primary borrower must qualify solo to remove the co-borrower, requiring strong credit and income.
How does a co-borrower’s credit affect the loan?
Lenders use the lowest credit score among borrowers, impacting approval or rates. A co-borrower with a 600 score could raise rates or risk denial.
Can two veterans combine VA benefits?
Yes, both can use their entitlement, splitting it evenly or using one’s fully. Both remain liable until the loan is paid or refinanced.
What if a co-borrower defaults?
All borrowers are equally responsible. Missed payments harm everyone’s credit, and lenders can pursue any borrower for repayment.
Can a co-signer live in the home?
No, co-signers cannot live in or own the property. If they occupy the home, they’re co-borrowers, subject to ownership requirements.
Is there a limit to co-borrowers on a VA loan?
The VA allows up to four borrowers, though lenders may limit to two or three due to underwriting complexity.
Tips for Success with Co-Borrowers and Co-Signers
- Set clear expectations: Agree on payment splits, ownership, and exit plans.
- Review credit early: Check everyone’s credit reports to catch issues.
- Choose an experienced lender: VA specialists handle complex scenarios like joint loans or dual military VA loans.
- Plan for contingencies: Discuss what happens if one borrower can’t pay.
Final Thoughts
VA loans are a powerful benefit for veterans, and co-borrowers or co-signers can make homeownership achievable, whether through a standard VA loan, dual military VA home loan, or joint VA loan.
By understanding eligibility, weighing risks, and partnering with a VA-approved lender, you can secure your dream home with confidence.
Start by verifying your eligibility and connecting with a lender today.
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