Are VA Loan Benefits Transferrable? A Reader Question
A reader asks, “Can I transfer my VA home loan to my sister or let my sister to use my VA home loan if i permit the VA to let my benefit to go with my sister because I’ve served in armed forces for 4 years and honorably discharged?”
“2nd, I’m a vet who’s served in armed forces and honorably discharged, then will it be OK to let a girlfriend of mine to purchase a house under her name but use my VA home loan as long as i agree to?”
VA home loans are assumable, which means that an eligible VA borrower can allow someone else–even a civilian–assume the financial responsibility for the mortgage as long as the lender participates in the loan assumption.
VA loan assumptions are permitted, but transferring VA loan benefits to someone other than the eligible borrower is not. In some cases, certain surviving spouses of military members who died on active duty or as a result of military service may be able to use the VA loan benefit, but the situation this reader question seems to be describing here is not permitted.
However, an eligible VA borrower CAN get a VA loan with a non-veteran borrower.
This is called a joint loan and only the veteran’s portion of the loan is guaranteed by the Department of Veterans Affairs, but it is possible to use VA loan benefits in this way. Borrowers should know that reduced VA loan funding fees apply in such cases, and the non-military borrower may be required to make a down paying depending on circumstances.
Situations like these should be discussed with a VA rep or a loan officer to get a clear idea of what is and is not permitted under the VA loan rules–speak to a VA rep by calling 1-800-827-1000.
Do you have questions about VA home loans? Ask us in the comments section.