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VA Loan Rules For Joint Loans

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There are some common questions about rules for joint loans between a veteran and non-veteran, or between more than one veteran where all borrowers are using VA loan entitlement. How does the VA handle these situations when it comes to the use of a veteran’s entitlement for his or her VA mortgage?

The explanation may sound deceptively simple–the VA simply divides the entitlement equally when it comes to VA loans where multiple veterans are using their VA loan benefit. The VA loan funding fee and use of entitlement are divided among all veterans on the loan.

According to VA Pamphlet 26-7, Chapter Seven, “If more than one veteran is involved, VA divides the entitlement charge equally between them if possible. If only unequal entitlement is available, unequal charges may be made with the written agreement of the veterans.”

When there’s an application for a joint loan involving one or more nonveterans, VA loan rules in Chapter Seven state:

  • the loan amount shown on the commitment is limited to the veteran’s portion of the loan, and
  • the percent of guaranty is based on the ratio of the amount of entitlement the veteran has available to the veteran’s portion of the loan.

VA will issue the Certificate of Commitment with a reminder that:

  • no part of the guaranty applies to the portion of the loan allocated to the nonveteran, and
  • in the event of foreclosure where a loss is sustained, the holder must absorb any loss attributable to the nonveteran’s portion of the loan.
  • The “Amount of Loan” reflects only the veteran’s portion of the loan. If more than one veteran used entitlement on the loan, it will reflect the total of all portions allocable to those veterans.

For more information on issues related to joint loans, discuss your specific needs with a loan officer or contact the Department of Veterans Affairs directly by calling 1-800-827-1000.

Do you have questions about VA home loans? Ask us in the comments section.

Bruce Reichstein

About Bruce Reichstein

Bruce Reichstein is an Expert on (VA) Military/Veteran Home Loan Guidelines for over 26 years. He is an experienced VA Loan Mortgage Banker who is passionate about assisting US Military Veterans utilize their Veteran Eligibility to purchase a home.

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