A married veteran can include a spouse as a co-borrower when obtaining a VA mortgage to buy a home. The spouse does not have to be a veteran. If the spouse is a veteran, the spouse may choose whether or not to use their own VA loan eligibility. As a result, a married veteran has several options available when deciding how to apply for a VA loan.
If you and your spouse are both eligible veterans, the loan limit for a VA mortgage is not doubled. The guarantee provided by the Department of Veterans Affairs does not necessarily increase when two married veterans obtain a VA loan. Instead, the inclusion of a co-borrower may improve your prospects of mortgage approval.
VA lending guidelines
The Department of Veterans Affairs publishes its mortgage guidelines in the VA Lenders Handbook. The handbook provides useful advice for veterans who are interested in obtaining a VA loan with a co-borrower. Like other types of mortgages, there are several financial factors considered when a veteran applies for a VA mortgage.
Chapter 7 of the VA Lenders Handbook begins by providing the definition of what the VA considers a joint loan. If you and your spouse both use your VA eligibility to purchase a home, the loan is a joint loan. If your spouse is not a veteran or is a veteran who chooses not to use their eligibility, the loan is not considered a joint loan.
The definition of a joint loan is important because some of the lending guidelines are dependent on whether or not your loan is a joint loan. Although two co-borrowers are both responsible for the repayment of a mortgage loan, the underwriting criteria are somewhat different for a spouse than for the primary borrower.
Multi-unit property purchase
A VA loan is not limited to the purchase of a single-family home. Chapter 7 of the VA Lenders Handbook advises that two veterans with a joint loan are eligible to purchase a certain type of multi-unit property. Because of the limited mortgage guarantee, you might have to make a larger down payment on the purchase of a multi-unit building structure.
Some veterans are not aware that their VA loan eligibility may be restored after a VA mortgage is paid off. If a home with no remaining mortgage is sold, you may use your eligibility again. On a one-time basis, you can keep a home after it is paid off and then buy another with your VA entitlement. Contact a realtor for more information about VA mortgage loans.