VA guidelines VA loans

All About Applying For VA Joint Loans

December 15, 2010

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All About Applying For VA Joint Loans

A VA joint loan is defined as;

–a loan where a veteran and a non veteran apply together for the loan
–two veterans apply together for a VA loan but only one uses VA entitlement
–a veteran and a spouse who is also a veteran, both entitlements used for the VA loan
–a veteran and one or more other veterans (not a spouse), who all use VA entitlement for the mortgage

According to the VA, “a loan involving a veteran and his or her spouse will not be treated as a “joint loan” if the spouse is not a veteran or is a veteran who will not be using his or her entitlement on the loan.”

The rules for VA joint loans are similar to other VA mortgages; the borrowers must certify the property is to be their primary residence, but the VA rules make an exception for any borrower who does not use VA entitlement for the loan. Joint loan rules are different than “single applicant” VA loans in other ways, too.

Two or more eligible veterans applying for a joint loan can buy a building with four family units and one business unit, plus one additional unit for each veteran on the loan.

VA regulations state that joint loans require prior approval by the VA when a veteran “will hold title to the property and any person other than the veteran’s spouse…” VA joint loans where the veteran and a spouse own the property do not require prior approval–any lender with automatic VA loan authority can approve the loan.

Joint loans require the lender to examine the credit and income of all applicants. Joint loans are attractive to some VA borrowers because a vet with good income can make up for the income weaknesses of another applicant. For example, a military member with more rank and higher pay can be an advantage when the co-applicant is a veteran with lower rank and pay.

VA credit requirements are not as flexible, though. The credit weaknesses of one applicant can’t be overshadowed by the credit strengths of the other borrower(s).

According to VA rules, the veteran applicant’s “…credit must be satisfactory and veteran’s income must be sufficient to repay that portion of the loan allocable to the veteran’s interest in the property.”

6 Comments
  1. Kenneth A Belangia

    I have a conventional loan on my home at the present. I am paying 6.004% interest rate. I have a DD-214 and Va certificate. Would I (and my wife) qualify for an IRR Va. loan? We are both retired with good fixed incomes. We had our home built 12 years and plan to keep it. As mentioned, we are retired and need to cut our house payment lower . We are paying around $1,475.00 a month and owe around $175,000 on our present mortage.. Please advise if it would be to our advantage to refinance. Ken and Jean Belangia

    • Joe Wallace

      Hi Kenneth, thanks for asking. An IRRRL loan is only for refinancing VA home loans, but you can apply for VA refinancing on conventional loans with other VA refi programs. A change in the VA refinancing program announced in October 2008 includes the following (according to the VA press release) "The new law makes changes to VA’s home loan refinancing program. Veterans who wish to refinance their subprime or conventional mortgage may now do so for up to 100 percent of the value of the property. These types of loans were previously limited to 90 percent of the value. Additionally, Congress raised VA’s maximum loan amount for these types of refinancing loans. Previously, these refinancing loans were capped at $144,000. With the new legislation, such loans may be made up to $729,750 depending on where the property is located."

  2. Frank Carbajal

    I am a retired veteran with about 24 yrs of military service. I am VA eligible. My son recently left the service with approximately 7 yrs of service. While still in the service he bought a house with his VA. He would like to buy another house with me as a co-borrower and live in that house we buy together. Would I be able to use my VA loan and with my son living in the house we buy together? I own two homes now but neither have a VA loan.

    • Joe Wallace

      Hi Frank, thanks for asking. There are a lot of variables here, but if you have VA eligibility to use for a home loan you may be able to use it in the way you described with a co-borrower. Occupancy is a tricky issue in cases like these--best bet is to discuss your specific situation with your VA Regional loan center. The co-borrower issue you mention for someone with an existing VA home loan can be a gray area because of the VA entitlement issue. You should ask your lender and the VA about this specific issue as your son may be able to use his remaining entitlement (if any) on a new VA loan but unless the original entitlement is restored fully (at the borrower's request, it is not automatic--with the original loan paid in full or otherwise discharged to the satisfaction of the VA) maximum VA loan entitlement may not be available for the co-borrower. You can find your VA Regional Loan Center here: http://www.benefits.va.gov/homeloans/rlcweb.asp

  3. Warren Rutledge

    I am a veteran with my DD214 and Certificate of Eligibility and would like to know if I can be on the same mortgage with my spouse and my mother?

    • Joe Wallace

      Hi Warren, thanks for your question. A VA loan can be given to a vet and spouse, but when a third party not related by marriage is on the loan, the VA will insure only the veteran or veteran/spouse portion of the loan. Hope this helps!

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