VA Loans and Spouses: What You Need to Know
The military offers additional pay and allowances for married military members, including more money for housing and with-dependent rates for cost-of-living allowances.
The extra money isn’t the only perk available to married military members and veterans; there are also some advantages to being married when it comes to applying for a VA mortgage.
Single veterans or active duty service members who want to buy a home with a VA guaranteed mortgage must meet VA occupancy requirements. A single member stationed overseas can’t, for example, have his or her parents occupy the home purchased with a VA loan instead—even if the overseas assignment is only a year or two.
But married service members can accept an overseas assignment and have the spouse remain behind to care for the home—that doesn’t violate the Department of Veterans Affairs occupancy rule. The VA official site says; “The law specifically provides that occupancy by the veteran’s spouse satisfies the personal occupancy requirement. The law makes no provision for occupancy by any other relatives as a substitute for personal occupancy by the veteran.
Some VA rules pertaining to spouses aren ‘t perks, but rather assignment of obligation. VA regulations allow a military member or veteran’s spouse to act as a co-borrower on the VA loan. But when the co-borrower isn’t a spouse or fellow service member, the rules change. “the guaranty is based only on the veteran’s portion of the loan. The guaranty cannot cover the nonveteran’s part of the loan. “ According to the Depatment of Veterans Affairs.
“Consult lenders to determine whether they would be willing to accept applications for joint loans of this type. Lenders that are willing to make these types of loans will likely require a down payment to cover risk on the unguaranteed, nonveteran’s portion of the loan.
If a married veteran dies before the VA guaranteed loan is paid off, the debt doesn’t go away. According to the VA,
“The surviving spouse or other co-borrower must continue to make the payments. If there is no co-borrower, the loan becomes the obligation of the veteran’s estate. Mortgage life insurance is available but must be purchased from private insurance sources.”
About Joe Wallace
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association.