VA Joint Loan Rules: How Many Units?A joint loan between more than one veteran has some options and an important perk borrowers should be aware of when deciding whether or not to apply for such a loan. The rules for VA joint loan procedures are found in VA Pamphlet 26-7, the VA Lender’s Handbook. It starts out by defining what is specifically meant by the phrase, “joint loan”:
“A loan involving two veterans who are not married to each other, and both using their entitlement. For purposes of applying the principles explained in this section, this term will also be used to represent any other type of joint loan involving only veterans, each of whom uses his or her entitlement. It can include loans to:
- the veteran and the veteran’s spouse who is also a veteran, if both entitlements will be used, or
- three, four, or more veterans, all of whom will use their entitlement.”
The perk associated with a two veteran joint VA loan (or more than two) is with the number of units permitted to be purchased with the mortgage loan. According to the VA, “If a property is to be owned by two or more eligible veterans, it may consist of four family units and one business unit, plus one additional unit for each veteran participating in the ownership.”
The VA loan rules for joint new purchase VA home loans adds, “…two veterans may purchase or construct residential property consisting of up to six family units (the basic four units plus one unit for each of the two veterans), and one business unit. If the property contains more than four family units plus one family unit for each veteran participating in the ownership and/or more than one business unit, the loan is not eligible for guaranty.”
Applying for a VA joint loan means the borrowers and lender must establish who in the transaction and determine who is going to use the VA loan entitlement–not all borrowers have to use that entitlement on the loan, but those who do must certify they intend to occupy the home as their home address. The borrowers who are not using VA entitlement are not required to certify occupancy.
For more information on VA joint loans, contact the VA directly or discuss your needs with a a lender.
Do you have questions about VA home loans? Ask us in the comments section.