One common question about VA home loans involves who can apply--the VA loan program is designed for eligible military members, so the eligibility for the loan in general is for these people--but VA loan rules allow co-borrowers, so there a natural set of additional questions about who may co-borrow with the veteran and how it all works.

Co-borrowers can be military or civilian, but for all transactions that involve non-military co-borrowers, the VA will only guarantee the veteran’s portion of the loan. Additionally, the veteran cannot be held responsible for disproportionate share of the loan.

The transactions that involve more than one military borrower are a bit more complex, because the VA loan funding fee and responsibility for the loan is divided equally among the co-borrowers.

Spouses are a different matter. VA loan rules recognize the spouse in the same way as a veteran when the two apply for the loan together. The VA loan process is unique in this way, but it should be pointed out that spouses cannot apply for a VA loan alone--the VA loan is not available to civilians who are not eligible through a minimum time of military service. (A former military spouse who is eligible for a VA loan is in a different category than a spouse who never served.)

One thing that’s important to know about these types of loans between a veteran and civilian, multiple veterans, or a veteran and spouse is that all applicants must qualify with credit, employment, etc. The strengths of one borrower cannot be used to make up for the weaknesses of another borrower where FICO scores and credit in general are concerned.

All borrowers will have to submit credit and employment information, and the VA loan funding fee, as previously mentioned, will be split evenly between any veterans on the loan. The veteran who applies with a civilian will not be charged a VA loan funding fee for the entire loan, but rather for the amount that the veteran is responsible for.

Speak to a loan officer about your needs for a VA mortgage involving one or more co-borrowers. You may be surprised at your options.

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