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VA Loans: Buying a Home with a Non-Veteran



June 6, 2017

The VA home loan program just can’t be beat for someone wanting a home loan requiring as little cash at the closing table as possible. VA loans don’t require a down payment, certain closing costs are restricted and the veteran isn’t allowed to pay for them and there is no monthly mortgage insurance payment. When a couple buys a home together only one of the buyers needs to have their VA eligibility as long as they’re married. If they’re not married and there is a coborrower on the loan, a VA loan can still be used but there are a couple of adjustments.

The VA loan program is one of three government-backed loans and carries with it a guarantee to the lender should the loan ever go into default at 25% of the loss. That guarantee applies when the veteran is the only applicant on the loan and is VA eligible or is married and the couple applies for the VA loan jointly.

But if they’re not married and the coborrower is not VA eligible, the guarantee is still there it’s just the guarantee drops from 25% of the loan to 12.5%, or half the original guarantee. In this instance, there will need to be a down payment of 12.5% to make up for the original guarantee. This is sometimes referred to as a “joint” VA home loan.

Not all lenders will issue such as loan but mortgage lenders experienced with the VA home loan program can. It’s just that the issue doesn’t come up very often and when it does the lender might not realize the marital status and VA eligibility are major issues. The mortgage company can tell the buyers they can qualify for a VA loan with no money down but once the loan file reaches an underwriter, things will change. The loan can still be approved but only with the lowered guarantee and a down payment of 12.5%.

For more information or questions about mortgage loans, please call  (855) 757-8748.

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