joint va loan unmarried

Buying a Home Together When You’re Not Married What You Need to Know About Joint VA Loans

When two people decide to buy a home together, they often do so as a married couple. However, unmarried couples are also eligible to apply for a joint VA loan. Joint VA loans allow two non-married people to share the financial benefits of a VA home loan.

While joint VA loans provide great homebuying opportunities for unmarried couples, they also have some unique requirements. As you consider a joint VA loan, here are key things you need to know:

What Exactly is a Joint VA Loan?

A joint VA loan is a mortgage issued to two borrowers who are not married to each other. Both borrowers are liable for repaying the loan, and both parties are on the property’s title.

Joint VA loans work similarly to regular VA loans with a few exceptions

• Both borrowers must be individually eligible for VA loans on their own. This means each person must be a veteran active-duty servicemember or qualifying military spouse.

• Only the veteran’s portion of the loan is backed by VA. The non-veteran’s portion does not receive any VA coverage.

• Borrowers’ credit is evaluated separately. The veteran must have satisfactory credit, though the non-veteran’s credit can offset income weaknesses.

• Entitlement is only charged against the veteran’s portion of the loan. The non-veteran’s share does not use any entitlement.

So in short, joint VA loans give unmarried couples access to VA financing, but have limits on how VA entitlement and guaranty are applied.

What Property Types Can You Buy?

Joint VA loans can be used to finance a wide variety of property types:

• Single family homes – The most common use of joint VA loans is purchasing detached single family houses.

• Multi-unit homes – Depending on the number of veteran borrowers, joint VA loans may be eligible for 2-4 unit properties. Having additional veteran borrowers increases the allowable unit count.

• Condos – Joint VA loans can purchase condos as long as the complex is VA approved.

• Manufactured homes – Joint loans can finance manufactured homes and mobile homes if they are classified as real estate.

• New construction – You can use a joint VA loan to build a home from the ground up. The home must be complete before full VA guaranty applies.

As you can see, joint VA loans provide flexible options for owning different property types with a partner.

How Do You Qualify for a Joint VA Loan?

To be eligible for a joint VA loan, each borrower must meet certain qualifications on their own:

1. Veteran Eligibility – At least one borrower must be an eligible veteran, active-duty servicemember, or military spouse. The non-veteran can be any type of borrower.

2. Entitlement – The veteran must have sufficient entitlement to cover their portion of the loan. Entitlement is not required for the non-veteran.

3. Income and Credit – Both borrowers must document sufficient individual income to support their share of the monthly payment. The veteran must have satisfactory credit, though the non-veteran’s credit can offset income weaknesses.

4. Occupancy – For the veteran to use their VA entitlement, they must certify intent to personally live in the home as their primary residence. Occupancy is not required for a non-veteran borrower.

5. Funding Fee – The veteran’s portion of the loan will require a VA funding fee, unless exempt. No fee applies to the non-veteran’s share.

Make sure you fully understand these eligibility standards before pursuing a joint VA loan. Consulting a lender early in the process can help ensure you meet all requirements.

How Do Joint VA Loans Work for Debt and Credit?

One unique aspect of joint VA loans is how debt and credit are handled for the veteran and non-veteran borrowers:

• Debt – The veteran must have adequate income to carry their portion of the monthly mortgage payment. The non-veteran’s income can supplement the veteran’s income to repay the overall loan.

• Assets – For married couples, assets are combined. But with unmarried joint loans, assets are credited to the individual borrower who owns them.

• Credit – The veteran must have satisfactory credit to qualify. However, the non-veteran’s credit can help offset any weakness in the veteran’s credit profile.

• Entitlement – Only the veteran’s portion of the loan uses entitlement. The non-veteran’s share does not impact entitlement.

• VA Guaranty – Guaranty only covers the veteran’s share of the loan. The non-veteran’s portion is not guaranteed by VA.

Make sure you fully grasp these points, as they determine how VA underwriting guidelines are applied to joint VA loans for unmarried couples.

What Are the Steps to Getting a Joint VA Loan?

The process for getting a joint VA loan involves:

1. Checking your individual eligibility – Assess if each of you individually meets VA loan requirements for credit, income, veteran status, etc.

2. Getting pre-approved together – Have a lender do a joint pre-approval for both of you as co-borrowers. This checks you can qualify together.

3. Finding a home – Search for a property you both want to purchase and apply for a joint loan.

4. Completing required VA paperwork – Provide all required VA forms and documents needed from each borrower.

5. Closing on the home – At settlement, you’ll both be on the deed and sign for the mortgage. Funding fee and guaranty calculations will be adjusted per VA guidelines.

6. Moving in – Once closed, you can move into your new home together! As long as the veteran lives in the home, VA requirements will be satisfied.

The process is very similar to a regular VA loan, with a few extra steps for documentation and calculations related to having two unmarried borrowers.

What Are Some Tips for Success with Joint VA Loans?

Joint VA loans present great homebuying opportunities, but also have some unique requirements to understand. Here are tips for making the most of a joint VA loan:

• Review all VA borrowing limits, entitlement use, guaranty, and funding fee rules for how they apply to unmarried joint loans. Don’t make assumptions.

• Check your individual credit and income to ensure you each meet minimum qualifications before applying jointly.

• Have a long-term plan for how you’ll manage ownership, mortgage payments, and home maintenance as unmarried co-borrowers.

• Consider working with a real estate agent experienced in joint homebuying scenarios who can help advise you.

• Look for lenders able to walk you through joint VA loan specifics, not just standard VA loans. Expertise is important.

• Be thorough with paperwork and documentation throughout the process to avoid any compliance issues.

While joint unmarried VA loans are certainly more complex, they can be an excellent home financing solution if you understand the requirements. Make sure you check all the details before buying with a partner!