VA LOAN COSIGNER

The Ultimate Guide to VA Loan Co-Signers and Co-Borrowers

September 13, 2024 • 8 min read

If you're a veteran or active-duty service member looking to secure a VA loan, you've probably come across terms like co-signer and co-borrower. These terms might seem confusing at first, but understanding them can help you make an informed decision about your mortgage. Whether you’re applying with your spouse, a fellow veteran, or exploring options for an unmarried partner or parent, this guide will clarify all your questions about VA loan co-signers and co-borrowers

What Is a VA Loan Co-Signer?

A VA loan co-signer is someone who takes responsibility for the mortgage payments alongside the primary borrower. If you, as the borrower, are unable to meet the lender's financial criteria on your own, having a co-signer can strengthen your loan application.

The co-signer provides added assurance to the lender by agreeing to repay the loan if you can’t. You might be wondering, "Can you have a cosigner on a VA loan?" Yes, you can, but there are specific rules.

The co-signer must live in the home with you, and they must either be your spouse or another VA-eligible borrower, such as a fellow veteran or active-duty service member. This is different from other types of loans, where non-occupant co-signers (like parents) are allowed.

Related: Best VA Loan Lender

Who Can Be a VA Loan Co-Signer?

Not just anyone can be a co-signer for a VA loan. The VA loan co-signer requirements are strict.

To be eligible as a VA loan co-signer, the person must be either:

  • Your spouse

  • A veteran

  • Or an active-duty service member eligible for a VA loan

If you're thinking, "Can a parent co-sign on a VA loan?"—the answer is usually no, unless that parent is also a veteran or service member.

VA loan cosigner parent arrangements are rare because non-VA eligible individuals generally cannot act as co-signers. If a non-eligible parent were to co-sign, the loan would no longer be fully backed by the VA, which could result in the need for a down payment. This rule ensures that VA loans remain focused on providing housing benefits to those who have served, and not just anyone.

Can You Have a Co-Signer on a VA Home Loan?

Yes, you can!

A VA home loan co-signer can help you qualify if your finances don’t meet the lender's standards. This is a major advantage for those who might have insufficient income or less-than-perfect credit.

The VA loan with a co-signer helps reassure the lender that the loan will be repaid, even if the primary borrower faces financial difficulties. But there are some rules.

Can you have a cosigner on a VA home loan who isn’t living with you? No. The co-signer must reside in the home as their primary residence, which makes the VA loan co-signer rules different from conventional loans that allow non-occupant co-signers.

VA Loan Co-Signer vs. Co-Borrower: What’s the Difference?

It's important to distinguish between a VA loan co-signer and a VA loan co-borrower. A co-signer guarantees the loan but does not share ownership of the home. They aren’t on the title, and they’re primarily responsible for covering the loan if you default.

A VA loan co-borrower, on the other hand, shares ownership of the home. This person is added to the home’s title, which means they own a portion of the home’s equity. Both their income and credit score are factored into the loan application, making it easier to qualify for a larger loan or better terms.

If you're wondering, "Can you get a VA loan with a cosigner who also owns the property?"—the answer is no. That person would be considered a co-borrower, not a co-signer. So, it’s essential to know whether you need the other person to help you qualify without ownership, or if they will share both the mortgage and the home.

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VA Loan Co-Borrower Requirements: What to Know

The VA loan co-borrower requirements are slightly different from those for co-signers. A co-borrower must meet the same eligibility criteria as the primary borrower. If your co-borrower is a VA-eligible borrower, such as a spouse or fellow veteran, their income and credit will be combined with yours to help you qualify for the loan. This can be particularly beneficial if you need a higher loan amount or better interest rate.If you're applying with a spouse, the process is pretty straightforward.

However, for unmarried borrowers, things get a bit more complicated. Most lenders are reluctant to approve loans for unmarried borrowers unless both parties are VA-eligible. This means if you’re applying with a partner who is not eligible for a VA loan, the VA will only guarantee half of the loan. As a result, you would need to make a down payment to cover the rest. This is why many VA loan unmarried borrowers choose to apply solo to take full advantage of the zero-down-payment feature of the VA loan.

What Are the Risks of a HELOC?

Although a HELOC on a VA loan can be a great financial tool, it comes with risks:

1. Variable Interest Rates: Most HELOCs have adjustable rates, which means your payments could increase if interest rates rise. You need to plan for potential fluctuations in your payment amounts or look for a lender that can offer you a fixed rate.

2. Risk of Foreclosure: Since your home is collateral, failure to make payments on a HELOC could result in foreclosure.

3. Closing Costs: Some lenders may charge fees for appraisals, processing, and other services. Be sure to review these fees before proceeding with your HELOC application.

4. Repayment Period: Once the draw period ends, your monthly payments may increase significantly as you begin paying both the principal and interest. Be prepared for this shift in financial responsibility.

Can Two Veterans Buy a Home Together Using a VA Loan?

Yes! Two veterans can use their combined VA loan benefits to buy a home together. In fact, this can be a smart way to secure a larger loan or more favorable terms. Both veterans would have their entitlements applied to the loan, and they could split the equity between them. This is one of the few situations where the VA allows two co-borrowers who are not married to qualify for a VA loan. Both must be VA-eligible borrowers, and their combined income and credit will be used to strengthen the loan application.

Can You Remove a Co-Signer from a VA Loan?

Once a VA loan co-signer is added to the loan, they typically cannot be removed unless the loan is refinanced or paid off.

So, if you’re thinking about adding a co-signer, make sure both parties fully understand the long-term commitment involved.

If you’re asking, "Can a VA loan have a cosigner who is later removed?", the only way to do this would be by refinancing the loan in your name alone.

VA Loan Eligibility and Co-Signer Requirements

To qualify for a VA loan with a co-signer, both the primary borrower and the co-signer must meet specific criteria. Here are the VA loan co-borrower requirements and co-signer requirements:

  • A valid Certificate of Eligibility (COE) proving military service.

  • A minimum credit score of 580-620, depending on the lender.

  • A stable income history, generally two years of employment.

  • A reasonable debt-to-income (DTI) ratio.

  • Funds for closing costs and the VA funding fee (which can often be rolled into the loan).

If you meet these requirements but still need extra financial backing, adding a co-signer or co-borrower can improve your chances of securing the loan.

VA Loan Co-Signer and Co-Borrower FAQ

Can you get a VA loan with a co-signer?

Yes, but the co-signer must either be your spouse or another eligible veteran or service member who will live in the home with you.

Can a parent co-sign on a VA loan?

In most cases, no. Only veteran or service member parents can co-sign a VA loan.

Can you have a cosigner on a VA home loan?

Yes, but the co-signer must live in the home and must either be your spouse or a fellow

What’s the difference between a VA loan co-signer and a VA loan co-borrower?

A co-signer guarantees the loan without sharing ownership, while a co-borrower shares both the loan and the ownership of the property.

What are the VA loan co-borrower requirements?

Co-borrowers must meet the same eligibility requirements as the primary borrower, including having a valid Certificate of Eligibility (COE), sufficient credit, and a stable income.

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