Joint VA Loan: What To Expect and How To Apply
You may think you have to be connected to the military to take out a home loan backed by the U.S. Department of Veterans Affairs (VA). This is usually the case, but there’s one exception: a joint VA loan. Joint VA loan requirements allow two or more people to enter into a VA mortgage for a shared home, even if not all of them have a military affiliation.
As long as at least one of the co-borrowers has VA loan entitlement, all co-borrowers can enjoy most — though not all — of the perks of a traditional VA loan. We’ll guide you through what to expect and how to apply for a joint VA loan together.
How does a joint VA loan work?
A joint VA loan allows two or more people to pool their resources together and apply for a mortgage guaranteed by the VA, even if only one of them meets the military service requirements. All parties then own the home together, sharing both liability and title.
Joint VA loans that include a non-military borrower typically require a down payment. That’s because the VA’s guaranty The VA helps military borrowers buy a home by “guaranteeing” their VA home loan: if you can’t repay your mortgage, the VA reimburses the lender up to a certain amount. This dollar amount — known as a “guaranty” — acts almost like mortgage insurance, reducing the risk for VA loan lenders covers only the veteran co-borrower’s portion of the loan.
VA loans are one of the benefits offered to military members in return for their service, and as a result, they come with more favorable financing terms, such as limiting lender fees to 1% of the loan amount. VA loans also have more-relaxed qualification hurdles than conventional mortgages. Nonetheless, any VA loan applicant will also need to clear certain credit and income standards. We’ll cover these below, or you can jump to the joint VA loan requirements section.
Joint VA loan vs. traditional VA loan
| Requirements | Joint VA loan | Traditional VA loan |
|---|---|---|
| Borrower(s) | Minimum of two borrowers | A single borrower The VA considers a military borrower and their fiancé or spouse to be a single borrower, |
| Down payment | Usually required | Not required with full VA loan entitlement |
| Number of units allowed | Up to six family units and one business unit, depending on the military status of the co-borrowers | Up to four units |
Who can get a joint VA loan?
Joint VA loans can involve three different combinations of borrowers:
- Military borrower with one or more non-military borrowers
- Two or more military borrowers using their VA entitlements
- Two or more military borrowers with not all applicants using their entitlement
1. Military borrower with one or more non-military borrowers
In this situation, only one applicant meets the military eligibility requirements for obtaining the home loan. This means the VA will back only the military borrower’s portion of the mortgage, and any non-military borrower may be required to make a down payment.
Key takeaway: You may have to make a down payment to cover the civilian borrower’s portion of the loan.
2. Two or more military borrowers using their VA entitlements
Because all applicants are military members or veterans, the VA will back each borrower’s share of the mortgage. That’s because each qualified military borrower gets VA loan entitlement as a part of their military benefits package. VA entitlement is a certain amount of money the VA will pay a lender if they default on the home loan. However, military borrowers who’ve used a VA loan in the past may have only a partial entitlement, potentially limiting the amount the VA will guarantee.
Key takeaway: You may have to make a down payment if you or your co-borrower has used a VA loan before and, as a result, have only partial entitlement.
Learn how to find out how much VA loan entitlement you have.
3. Two or more military borrowers with not all applicants using their entitlement
Despite the fact that all applicants meet the military eligibility requirements, this scenario is similar to when a veteran-borrower applies jointly with a non-military borrower. That’s because one or more of these borrowers has no remaining VA entitlement. Just like a non-military borrower, then, their portion of the loan won’t be backed by the VA.
A military member may not have their VA entitlement to use if they’re still paying off another VA loan or they defaulted on a previous VA loan.
Key takeaway: You may have to make a down payment if either you or your co-borrower has no remaining VA entitlement.
Learn how to restore your VA loan entitlement.
Joint VA loan requirements
| Minimum service requirement | At least one co-borrower must meet the VA’s minimum service requirement |
| Credit | No minimum, but most lenders prefer at least a 620 |
| DTI | 41% maximum |
| Employment | Two years of employment history |
| Occupancy | All co-borrowers must live in the home as their primary residence (with some exceptions) |
| Residual income | Document sufficient residual income according to VA guidelines for your location and family size |
| VA funding fee | Pay a VA funding fee of 1.25% to 3.3% of the loan amount at closing, unless you qualify for an exemption |
When a joint VA loan can be a good option
- You don’t have the income to qualify on your own. If you apply with other eligible military or non-military borrowers, they can help you qualify with their income.
- You have too much debt to qualify on your own right now. VA lenders prefer a 41% debt-to-income (DTI) ratio or lower, although they sometimes make exceptions. All of your debt counts toward this ratio (including student loan payments). If you apply with another eligible military borrower with less debt and/or a higher income, that could bring down your DTI ratio.
- Your VA entitlement is in use on another home. If your current home has a VA loan and you need to buy a new home before selling it, your entitlement will be reduced or eliminated. If you have partial entitlement, borrowing with another military borrower who has a full entitlement will ensure more of the home loan is guaranteed by the VA.
- You want to purchase a multifamily home with more than four units. With military VA loan co-borrowers, you can buy a four-unit property with one family unit for each military participant and one business unit. For example, two military borrowers could purchase a six-unit property with one business unit.
When a joint VA loan might be a bad option
- You don’t want to make a down payment. There are many scenarios in which a joint VA loan requires a down payment. If you were attracted to a VA loan because you wanted to put zero down, you may want to research alternative low- and no-down-payment loan options.
- You want to use your VA loan entitlement again in the near future. If you’re a veteran borrower, choosing a joint VA loan means using a portion of your entitlement. This could limit your ability to use the VA loan program again in the future, forcing you to wait until the joint loan is paid off or entitlement is otherwise restored.
- Your co-borrower’s financial picture is radically different from yours. Two of the biggest factors determining the mortgage rates you’ll be offered are your credit score and DTI ratio. If one borrower has significantly worse credit or DTI, it could make the loan more costly.
- You’re not ready to risk your credit. All parties in a joint VA loan are fully responsible for the loan, which means if one person fails to make payments, the other has to cover the debt to avoid mortgage default.
- You don’t know if your relationship with your co-borrower(s) will last. If the co-borrowers in a joint VA loan decide to part ways, handling the loan can become very complicated. For instance, separating things equally might be difficult if one person contributed a down payment, while the other had their portion covered by a VA entitlement, or if two veterans went in with different entitlement amounts. Plus, both parties are responsible for the loan, which means that both people’s credit can be damaged if one person remains in the home and misses mortgage payments.
How to apply for a joint VA loan
1. Confirm your eligibility
All military-affiliated co-borrowers need to request a certificate of eligibility (COE) from the VA. This document confirms to lenders that you qualify for this home loan benefit.
2. Verify your entitlement
If you’ve never used your VA home loan benefit or your previous VA loan has been paid in full, you have your full entitlement. Your COE will list your exact entitlement amount.
3. Know your funding fee
How much you’ll need to pay in VA funding fees depends on how big your down payment is and whether it’s the first time you have used your VA loan benefit. Opting to make a larger VA loan down payment will reduce your funding fee.
4. Reach out to VA lenders
Before you decide on a loan, it can pay to shop around with three to five lenders. By submitting applications on the same day, you can then compare the loan estimates you receive to find the best deal.
Read more about our picks for the Best VA loan lenders.
Pros and cons of joint VA loans
| Pros | Cons |
|---|---|
Easy qualification. You can qualify for a loan more easily with additional borrowers, particularly if you have a lower income and high debt. Buying power. You can buy a more expensive home than you could on your own, as the income of all borrowers is considered. Low fees. You'll pay lender fees worth only 1% of your loan amount. Lowe loan costs. You don’t need to purchase any mortgage insurance and may not need a down payment. | Funding fees. You could pay a VA funding fee worth as much as 3.3% of your loan amount. Down payment. You may have to make a down payment if your co-borrower is nonmilitary, or a service member or veteran who isn't using their entitlement. Joint ownership. You’ll need to involve other owners in decisions about selling or refinancing. VA benefit use. You may tie up your VA entitlement, making it harder to purchase another property using VA benefits in the future. |
Frequently asked questions
The VA offers a guaranty percentage calculator, which can help you understand how much of your guaranty you have remaining. Once you know this number, it’s possible to calculate how much of a down payment you’d need to make with a new VA loan. That said, the best way to find out how much of a down payment you’ll need to make on your joint VA loan is to reach out to a mortgage lender that specializes in VA loans. They can do this calculation for you, based on the financial and military profiles of you and your co-borrower(s).
Rather than trying to do this yourself, it’s best to reach out to a lender that specializes in VA loans. They can help you calculate how each co-borrower’s entitlement will affect your joint VA loan. If you’d like to better understand the ins and outs of the VA’s rules, you can also read the section on how to calculate guaranty and entitlement use in the VA Lender’s Handbook.
Yes, couples who are unmarried can apply for a joint VA loan (in fact, in most cases, the VA considers a married couple to be one borrower). The military status of both partners will affect whether the VA will back both borrowers’ portion of the loan and if a lender will require a down payment.
Typically, lawful permanent residents and non-permanent residents qualify for most mortgage programs in the U.S., so adding one as a borrower to a military borrower’s application should work. If the noncitizen is the one providing the military eligibility to get a VA loan, they will have to meet service requirements and have lawful residence status. Widows or widowers of eligible service members who aren’t U.S. citizens may also qualify for a VA loan on their own or be added to a joint VA loan.
The loan limit rules are the same for both joint and traditional VA loans. Those with full entitlement have no loan limits, while those with a partial entitlement will have loan limits applied. In this case, a borrower’s limit is based on local conforming loan limits and equates to 25% of the limit, minus the share of entitlement already used.
It’s important to remember that the VA loan limit doesn’t cap the amount you can borrow to finance your home purchase. It applies only to the amount the VA guarantees if you stop making mortgage payments.
Yes, you can apply for a joint VA loan with a non-married partner, provided one of you meets the military service requirements necessary to qualify.