VA Loan Spouse Requirements

The VA home loan program, offered through the U.S. Department of Veterans Affairs (VA), provides eligible veterans, active-duty service members, and their families with significant benefits to help them achieve homeownership.

However, when it comes to including a spouse in the loan application, there are specific requirements and considerations that must be met.

This article will explore the various aspects of VA loan spouse requirements, including eligibility, co-borrower rules, surviving spouse benefits, and other related topics to help you understand how your spouse can be involved in the VA loan process.

Table of Contents

Eligibility for VA Loans with a Spouse

When a veteran or service member applies for a VA loan, their spouse can typically be included in the application as a co-borrower.

This can be beneficial in terms of combining incomes to qualify for a larger loan or to meet the VA’s residual income requirements. However, there are specific rules and conditions that apply:

Married Couples: If the veteran is legally married, the spouse’s income can be used to help meet the income requirements for the loan. This can be particularly advantageous if the veteran’s income alone does not qualify for the desired loan amount.
Co-Borrower Requirements: The veteran and spouse must meet the VA’s credit and income requirements together. The spouse’s credit score and financial history will be considered alongside the veteran’s.
Non-Veteran Spouse: If the spouse is not a veteran, they can still be included as a co-borrower, but the VA loan will only cover the veteran’s portion of the loan. This means the veteran must have enough entitlement to cover their portion of the loan.

Surviving Spouse Benefits

The VA loan program also offers benefits to surviving spouses of deceased veterans under certain conditions. These benefits are available to help surviving spouses achieve homeownership, even after the passing of their veteran spouse.

Eligibility for Surviving Spouses

To be eligible for a VA loan as a surviving spouse, the following conditions typically apply:

Service-Connected Death: The veteran must have died in service or as a result of a service-connected disability.
Missing in Action or Prisoner of War: The veteran was missing in action (MIA) or was a prisoner of war (POW) for a certain period.
Unmarried Spouse: The surviving spouse must not have remarried before a certain age (typically before age 57, depending on the circumstances).
Certificate of Eligibility (COE): The surviving spouse must obtain a COE, which serves as proof of eligibility for VA loan benefits. This can be requested through the VA’s website or by working with a VA-approved lender.

Table 1: Eligibility Conditions for Surviving Spouses

Eligibility Criteria	Details
Veteran’s Death	Must be service-connected or occurred while in service.
Marital Status	Unmarried or remarried after age 57 (depending on specifics).
Certificate of Eligibility (COE)	Required to access benefits.
Income and Credit Requirements	Must meet standard VA loan criteria.

VA Loan Entitlement and Spouse Considerations

The VA loan program is built around the concept of “entitlement,” which is the amount the VA will guarantee on a loan. When a spouse is involved, understanding how entitlement works is crucial:

Full Entitlement: Veterans with full entitlement can typically borrow as much as a lender is willing to lend without needing a down payment, as long as they meet the lender’s credit and income requirements.
Entitlement Restoration: If the veteran has used their VA loan benefits before, they may need to restore their entitlement by selling the home and paying off the loan, or by using a one-time entitlement restoration option.
Spousal Entitlement: If both the veteran and the spouse are eligible veterans, they can combine their entitlements, potentially qualifying for a larger loan.

Credit and Income Considerations

When applying for a VA loan, both the veteran and the spouse’s credit and income are considered by lenders. This includes:

Credit Score: Lenders typically require a minimum credit score, which can vary. If the spouse has a significantly lower credit score, it could impact the loan terms.
Income Stability: The spouse’s income can help meet the VA’s residual income requirements, making it easier to qualify for the loan. However, this income must be stable and reliable.
Debt-to-Income Ratio (DTI): Lenders will calculate the combined DTI ratio, which includes the veteran and spouse’s debts compared to their combined income. A lower DTI ratio is preferable.

Co-Borrower Options Beyond the Spouse

In some cases, veterans may wish to include co-borrowers other than their spouse in the loan application. This is possible, but it comes with certain restrictions:

Non-Spouse Co-Borrowers: If a non-spouse co-borrower (e.g., a friend or family member) is included, the loan will be considered a “joint loan,” and the VA will only guarantee the veteran’s portion of the loan.
Down Payment Requirements: For joint loans, a down payment may be required for the non-veteran co-borrower’s portion of the loan.
Entitlement Allocation: The veteran’s entitlement will only cover their portion of the loan, potentially requiring a down payment for the co-borrower’s share.

Table 2: VA Loan Considerations in the Event of Divorce

Scenario	Considerations
Veteran Retains Home	Must continue to meet loan obligations.
Spousal Release	May require refinancing to remove spouse from the loan.
Entitlement Impact	Entitlement remains tied to the property until loan payoff.

Conclusion

Understanding the VA loan spouse requirements is essential for veterans and their families as they navigate the home buying process. Whether you are applying for a loan with your spouse, as a surviving spouse, or considering co-borrower options, it’s important to be aware of the specific rules and conditions that apply. By understanding these requirements, veterans can maximize their benefits and achieve their homeownership goals.