VA Guidelines On Co-Borrowers On VA Home Loans

This Article Is About VA Guidelines On Co-Borrowers On VA Home Loans 

What Are VA Guidelines On Co-Borrowers?

Income is one of the most important factors when qualifying for VA Loans.

• VA Loans have specific mortgage lending guidelines when it comes to co-borrowers and is different than any other mortgage loan programs with regards to co-borrowers
• VA Loans is the best mortgage loan program available for home buyers
• This is because homebuyers do not have to put any money down on a home purchase
• Buyers can purchase a home with no money out of pocket with a VA Loan
• This holds true as long as you can get a sellers concession by the home seller to cover the closing costs
• Or in the event, if buyers cannot get a sellers concession, borrowers can get a lenders credit by the lender to cover part or all of the closing costs

In this blog, we will cover and discuss VA Guidelines On Co-Borrowers On VA Home Loans.

Mortgage Rates On VA Home Loans

Mortgage rates on VA Loans are the lowest than any other loan program.

• Mortgage interest rates on VA Loans are lower than mortgage rates on FHA, USDA, and Conventional Loans
• There is no mortgage insurance premium on VA Loans even though the home buyer does not put any money down and the mortgage loan is 100% financing
• The Department of Veteran Affairs is the governmental entity that sets standards and VA Lending Guidelines on VA Loans and insures VA Loans

The Department of Veteran Affairs does not originate nor fund VA Loans.

Guarantee By The Department Of Veterans Affairs

The Department of Veteran Affairs insures VA Loans to lenders as long as the loans they originate and fund adhere to VA mortgage guidelines.

• Unfortunately, not all home buyers can qualify for VA Loans
• Only Veterans of the United States Armed Forces with a VA Certificate of Eligibility can qualify for a VA Loan
• Veterans with a VA Certificate of Eligibility can enjoy the great benefit of buying a home with a VA Loan with no money down and no closing costs with extremely low mortgage rates
• VA Loans have very lenient lending guidelines
• However, VA Guidelines On Co-Borrowers are pretty strict

VA Guidelines On Co-Borrowers: VA Guidelines On Co-Borrowers Versus Other Mortgage Programs

Every mortgage loan program has its own mortgage lending guidelines with regards to co-borrowers.

• With FHA Loans, borrowers can have co-borrowers who are related to the main borrower
• The relationship for co-borrowers to the borrower needs to be as follows:
• The co-borrower needs to be related to the borrower by marriage, law, or blood
• So in order for someone to be eligible to become a co-borrower on an FHA Loan, co-borrowers need to be a spouse, son, daughter, brother, sister, mother, father, grandmother, grandfather, step-son, step-daughter, step-brother, step-sister, step-mother, step-father, step-grandmother, step.-grandfather
• However, the enforcement of the actual relationship depends on each particular lender
• There are many lenders like myself that will not check
• We will just take the borrower’s word on the relationship of the co-borrower to the main borrower on an FHA Loan

Fannie Mae does not allow co-borrowers on Conventional Loans. However, Freddie Mac does permit co-borrowers on Conventional Loans and the co-borrower does not have to be related by blood, marriage, or law like FHA Loans.

Updated VA Guidelines On Co-Borrowers

The Department Of Veteran Affairs does allow a co-borrower to be added on a VA Loan:

• However, the co-borrower needs to be the spouse of the Veteran
• Unfortunately, if you are a fiance of the Veteran or a live-in boyfriend and/or live in girlfriend of the Veteran, you cannot qualify to be a co-borrower on a VA Loan
• There are many cases where a Veteran has a live-in girlfriend and/or live-in boyfriend who has been living together for many years
• They may have children together
• However, if they are not legally married, they do not qualify to be a co-borrower on a VA Loan

I recently had a call from a Veteran with a VA Certificate Of Eligibility who was living with an ex-spouse.

• They have divorced many years ago but reconciled and were living together
• They also had kids together and were interest in purchasing a home
• Unfortunately, the Veteran needed the ex-spouse to be added as a co-borrower in order to qualify for the VA Loan
• Although they are a couple and have reconciled after their divorced and are living together, the ex-spouse cannot be added on as a co-borrower unless they got married again
• We can proceed and process and underwrite the VA Loan
• However, the marriage will be a condition in them closing on their VA Loan
• They decided to get re-married in order to qualify for the VA Loan
• Case scenarios like these often happen where couples get divorced and reconcile and get remarried again
• On this case scenario, them remarrying made the VA Loan happen and these folks will close on their VA Loan

If you are a Veteran and would like to qualify for a VA Loan, please contact us at Gustan Cho Associates at 800-900-8569 or text us for faster response. Or email us at gcho@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays to take your phone call or answer your emails on any questions you may have in qualifying for a VA Loan.