A joint VA loan allows an eligible Veteran to purchase a home with someone other than their spouse, whether that person is a family member, friend, or unmarried partner. Joint loans open homeownership opportunities to Veterans who want to pool resources with non-Veteran co-borrowers.

The key difference between a joint loan and a regular VA loan is that the Department of Veterans Affairs only backs the Veteran's portion of the loan, which can affect down payment requirements and how the loan is structured. Understanding how joint VA loans work can help you decide whether this financing option fits your homebuying goals.

What Makes a Joint VA Loan Different

According to the VA Lender's Handbook Chapter 7, a joint VA loan is when a Veteran applies for a VA-backed mortgage with someone who isn't their spouse. This distinction matters because the VA treats married couples as a single entity for loan purposes, even if only one spouse meets the service requirements.

When a Veteran buys a home with their legal spouse, it's processed as a standard VA loan with full VA backing. But when a Veteran partners with a non-spouse co-borrower, the VA guarantee (the amount the VA will back) covers only the Veteran's share of the loan amount. This partial guarantee often requires the non-Veteran borrower to make a down payment on their portion.

The flexibility of joint VA loans means Veterans can buy property with various co-borrowers, including unmarried partners, adult children, parents, siblings, or friends. All borrowers share ownership and responsibility for mortgage payments.

Who Can Qualify for a Joint VA Loan

To qualify for a joint VA loan, at least one borrower must be VA-eligible. VA eligibility requirements usually include:

  • Active-duty service members who have served at least 90 continuous days
  • Veterans who served the minimum duty requirements for their era
  • National Guard or Reserve members with at least six years of service
  • Surviving spouses of Veterans who died in service or from service-connected disabilities

The VA-eligible borrower must obtain a Certificate of Eligibility (COE) before applying. This document confirms their benefit level and shows whether the borrower is exempt from the VA funding fee due to disability.

According to the VA Lender's Handbook Chapter 7, only the Veteran using their benefit must certify they will personally live in the home. The VA does not require non-Veteran co-borrowers to occupy the property. However, many lenders impose their own requirement that all borrowers live in the home, so check with your lender about their occupancy policies.

Lenders evaluate the combined financial profile of all applicants. They review credit scores, income verification, employment history, and debt-to-income ratios for each borrower. The lowest credit score among applicants may determine loan approval and interest rates.

Understanding VA Benefits and Guarantees

VA entitlement (the amount the VA will back) represents what the Department of Veterans Affairs will guarantee on a home loan. The VA typically guarantees 25% of the loan amount. Veterans with full entitlement can borrow any amount a lender approves without hitting a limit. Veterans with partial entitlement may face limits based on their county's conforming loan limits.

When multiple eligible Veterans apply together, they can combine their benefits to increase the VA guarantee. For example, two Veterans with full entitlement could potentially buy a larger property or eliminate down payment requirements entirely.

But here's where joint loans with non-Veterans get complicated. As explained in the VA Lender's Handbook Chapter 7, the VA calculates the guarantee by dividing the total loan amount by the number of borrowers, then applying the guarantee only to the Veteran's portion.

For example, take a $400,000 home purchase with one Veteran and one non-Veteran borrower. The loan would be divided equally, giving each borrower a $200,000 share. The VA would guarantee 25% of the Veteran's $200,000 portion (up to applicable limits), leaving the non-Veteran's $200,000 share without VA backing. Most lenders require a down payment to cover the portion the VA doesn't back, often around 12.5% to 25% of the non-Veteran's share.

Down Payment Requirements and Exceptions

Traditional VA loans may be eligible for no down payment, but joint VA loans follow different rules. When the VA guarantee doesn't cover the entire loan amount, lenders often require cash to bridge the gap.

The down payment amount depends on several factors such as the home's purchase price, the number of borrowers, how many are using VA benefits, and each Veteran's available benefit amount. Veterans with partial entitlement from previous VA loans may need larger down payments even when buying with another Veteran.

There are two ways to avoid down payments on joint VA loans. First, if all borrowers are VA-eligible Veterans with full entitlement and they all choose to use it, the combined guarantees may cover the entire loan. Second, some lenders offer portfolio loans or alternative financing structures, though these can come with higher interest rates or stricter qualification requirements.

The VA Funding Fee for Joint Loans

The VA funding fee is a one-time charge that helps offset the cost of the VA loan program. For joint VA loans, the funding fee calculation gets more nuanced.

According to VA policy, funding fees are calculated based on each borrower's share of the loan amount. The fee percentage depends on whether it's a first-time or subsequent use of VA benefits and whether the borrower makes a down payment. As of current rates, first-time users pay 2.15% of their loan portion with no down payment, while subsequent users pay 3.30%.

Here's an example from the VA Lender's Handbook: On a $95,000 loan where one Veteran and one non-Veteran are borrowing together, the Veteran's share is $47,500. If the Veteran is a first-time user, they would pay a funding fee of approximately $712.50 (1.5% of their portion).

Veterans receiving VA disability compensation are exempt from funding fees. This exemption appears on their Certificate of Eligibility. The funding fee can be financed into the total loan amount, meaning borrowers don't need to pay it upfront at closing. 

Application Process and Documentation

Applying for a joint VA loan requires more documentation than a traditional VA loan. The process starts with the VA-eligible borrower requesting their Certificate of Eligibility through eBenefits, directly through VA, or through a lender who can access the VA's Web LGY system.

Both borrowers need to provide standard mortgage documentation: proof of income, employment verification, bank statements, tax returns, and credit authorization. The VA-eligible borrower must also submit their DD-214 discharge papers or Statement of Service if still on active duty.

When a joint VA loan involves a non-spouse, non-Veteran co-borrower, the VA requires prior approval before closing. This means lenders can't use their automatic authority to approve these loans. Instead, they must submit the complete loan package to the VA for review, which can add time to the process.

All borrowers sign the loan agreement and appear on the property title. This creates joint responsibility, meaning each borrower is fully responsible for the entire debt, not just their portion. If one borrower stops paying, the other remains legally obligated to cover the full monthly payment.

When Joint VA Loans Make Sense

Joint VA loans work well in specific situations. Veterans who can't qualify for enough mortgage on their own income can add a co-borrower to boost their purchasing power. By combining incomes and credit profiles, two borrowers may qualify for a larger loan amount than either could alone.

Unmarried couples who aren't ready for marriage but want to buy a home together benefit from joint VA loans. The arrangement allows them to share ownership and financial responsibility without the legal commitment of marriage. Similarly, adult children caring for aging Veteran parents, or Veterans investing in rental property with business partners, can use joint loans to structure shared ownership.

If a Veteran has used their benefit on another property and hasn't yet restored it, partnering with another eligible Veteran who has full entitlement can facilitate a new home purchase. The second Veteran's benefit can provide the necessary guarantee, though down payment requirements depend on the numbers.

Important Considerations and Potential Drawbacks

  • Joint responsibility means joint risk. If one borrower defaults or stops paying, the other borrowers must cover the full payment or face foreclosure. It’s an arrangement that requires trust and communication between co-borrowers.
  • Selling or refinancing becomes more complex with multiple owners. All borrowers must agree to any changes in ownership or loan terms. If one borrower wants to sell their share or refinance independently, the process requires cooperation from all parties, and sometimes requires one borrower to buy out the other's equity.
  • Not all lenders offer joint VA loans with non-Veteran co-borrowers. Some lenders only approve joint loans when all parties are VA-eligible. Veterans should confirm their lender's policies before getting too far into the homebuying process.

Ready to explore whether a joint VA loan fits your homebuying goals? Visit our Learning Center to understand all your options for achieving homeownership through your VA benefits.

Frequently Asked Questions

Can I use a joint VA loan to buy a home with my non-Veteran fiancé or fiancée?

Yes, you can apply for a joint VA loan with your fiancé or fiancée. However, the VA will only guarantee your portion of the loan, and your partner will likely need to make a down payment on their share. If you marry before closing, you can switch to a standard VA loan where your spouse's income counts without requiring separate benefits or a down payment.

How much down payment will my non-Veteran co-borrower need to make?

Down payment requirements vary by lender and loan amount, but can range from 12.5% to 25% of the non-Veteran's portion of the loan. The exact amount depends on the VA guarantee calculation and lender requirements.

Can two Veterans use their benefits on the same joint VA loan?

Yes, multiple eligible Veterans can combine their benefits on a single joint VA loan. Each Veteran can choose to use all, part, or none of their available benefits. When multiple Veterans use full entitlement, it increases the VA guarantee and may eliminate down payment requirements entirely.

What happens to my VA benefit after a joint VA loan closes?

Your benefit remains tied to that property until you sell the home and pay off the loan, or until you refinance to a non-VA loan. You can restore your benefit by selling the property and paying off the VA loan, or through a one-time restoration if you keep the property but pay off the loan. 

Do both borrowers need good credit scores to qualify for a joint VA loan?

While the VA doesn't set a minimum credit score, lenders typically evaluate the lowest credit score among applicants when determining loan approval and interest rates. If one borrower has significantly better credit, it may not offset a co-borrower's low score.