Can I use Co-borrower for VA mortgage loan?

Yes. There are several benefits to adding a co-borrower on your mortgage loan.

What is a VA Loan?

VA Loans are loans provided to VA eligible borrowers provided by the Department of Veterans Affairs and secured by residential dwellings (up to 4 units). VA loans are underwritten and funded by a VA approved lender, based on the guidelines determined by the Department of Veterans Affairs.  Here are some benefits of using a VA Mortgage:

• VA loans can help to finance a property with absolutely no down payment.
• There is also no monthly PMI (premium mortgage insurance, as compared to other types of financing it is required.
• VA financing has the most flexible lending guidelines, though some financing institutions will add additional credit overlays, some direct lender seller/servicers will directly follow VA guidelines.
• A veteran can utilize bonus entitlement which in some situations allow them to carry more than one VA loan, unlike FHA financing where there are very strict requirements to have more than one loan.
• VA financing has no minimum credit score requirement, no maximum debt ratio requirement, no maximum loan amount and never has a monthly PMI (premium mortgage insurance) requirement.

What is a VA loan entitlement or VA eligible borrower?

VA Loan eligibility is primarily determined by the following factors:

Will vary based on exactly when the veteran has served, but typically under the following general parameters;

• Served at least 181 days of active service during peacetime
• Served 90 days of active service during wartime
• Currently serving active duty for 90 days or more
• Served more than 6 years of active service with National Guard or Reserves
• If discharged with a service connected disability, the typical timing requirements would be waived
• US citizens who have served in the Armed Forces of a government allied with the United States in World War II, or Members of other select organizations can also be eligible;
• Public Health Service officer
• Merchant seaman during World War II
• Midshipman at United States Naval Academy
• Cadet in United States Military, Air Force or Coast Guard Academy
• Officer of the National Oceanic and Atmospheric Administration

If you have received an other than honorable, bad conduct or dishonorable discharge, you may still be able to qualify by applying for a discharge upgrade through the VA Character of Discharge review process.

Even if you don't meet the minimum service requirements, you may still be able to obtain a COE if you were discharged for one if the following reasons;

- Hardship, or the convenience of the government (you must have served at least twenty months of a 2-year enlistment), or Early out (you must have served at least 21 months of a 2-year enlistment), or A service-connected disability (a disability that was related to your military service), or Certain medical conditions, or a Reduction in force.

What is a certificate of Eligibility (COE)?

A COE is a certificate provided by the Department of Veterans Affairs to show your VA approved lender that you are eligible for a VA Loan. For more information on how to obtain a COE for your VA loan, please visit the Department of Veterans Affairs website which provides a guide on how to obtain your COE for VA loan eligibility.

Veteran eligibility may also be restored for additional use, either to replace a home that is sold, or to purchase an additional home, though there may be a need to utilize "bonus entitlement" depending on the veterans situation.

If a veteran has previous caused the VA a loss, like a foreclosure, there could still be some available eligibility, but again, likely utilizing entitlement, and there will also be additional stipulations or requirements from the VA in these cases before being able to utilize the VA benefits.

There are also programs for surviving spouses, where you can obtain a COE if you are the spouse of a veteran and at least one of the below descriptions is true for them;

The veteran is missing in action, or the Veteran is a POW (prisoner of war), or the Veteran died while in service or from a service-connected disability and you have not remarried, or the Veteran had been totally disabled and then died, but their disability may not have been the cause of death in certain situations, or the Veteran died while in service from a service-connected disability and you didn't remarry before you 57 years old or before December 16th, 2003.

What is a Joint VA Loan?

A VA joint loan usually refers to a loan that is made to a VA eligible borrowers that require a non veteran co borrower. The veteran and the co borrower (without VA loan eligibility) will both be liable and own the security. A joint VA loan is a loan with the following conditions

• The veteran and one or more nonveterans (not spouse),
• The veteran and one or more veterans (not spouse) who will not be using their entitlement,
• The veteran and the veteran’s spouse who is also a veteran, and both entitlements will be used, or
• The veteran and one or more other veterans (not spouse), all of who will use their entitlement.
• 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.
• A loan to a veteran and fiancé who intend to marry prior to loan closing and take title as veteran and spouse will be treated as a loan to a veteran and spouse (conditioned upon their marriage), and not a joint loan.

Can you have a "non-occupant" co-signer (or co borrower) on a VA loan?

Yes, a co borrower that is not using VA loan eligibility does not need to live in the subject property. However, any borrower using their VA loan eligibility for a joint VA loan MUST occupy the property.

What are the benefits of using a non VA eligible co borrower?

• Can significantly increase your purchasing power, though a down payment can sometimes still be required.
• Still no monthly PMI (premium mortgage insurance) which is a massive benefit over other types of financing.
• Help to increase the likelihood of an approval for an unsatisfactory credit score (credit profile).