The media is chattering about a housing bubble, just like 2007. Is it real? Could…
Can a Veteran and Non Veteran Be on a VA Home Loan Together?
The answer is Yes!!!
Here is what needs to happen.
Typically a veteran will have what is called full entitlement on a VA loan, meaning, if they don’t have a current VA loan or have not defaulted on a VA loan previously, they will have their full entitlement! What this means is, if the veteran qualifies for the loan amount, they have full entitlement and will not have to put any money down.
However, if a veteran is using his VA loan benefits and wants to have a non-veteran co-borrower on the loan with them. They only get half of their entitlement, meaning VA will only insure half of the guarantee!
So what does this look like?
Here is an example with some easy math to show. Again, this is just an example and I like easy math!!
Veteran wants to purchase a home for $100,000 purchase price! They are having their son, who is non veteran, be on the loan with them to help them qualify!
Since the son is a non veteran, we don’t get to use the full entitlement available for the veteran.
So instead of a no money down VA loan, our guarantee is cut in half. The VA’s guarantee is 25%. That guarantee gets cut in half or 12.5%. So if it is a $100,000 loan amount and we only have 12.5% guarantee now, our required down payment would be 12.5% or $12,500/
Here is another example using the same scenario! $500,000 purchase price, Guarantee gets cut in half…. So required down payment in this circumstance would be a minimum of $62,500. Loan amount would be $437,500. (This is assuming no funding fee)
One important thing on a VA joint loan where the co borrower is a non veteran.
In these situations, the loan has to be packaged up and sent off to the nearest VA Regional Center for prior approval. This means, the entire package has to be put together, fully underwritten, Appraisal and pest inspection back and sent off to the VA.
This is not uncommon and is done very often, so if someone is telling you no, please give us a call so we can go over your scenario with you. As always, thanks for watching, and please like and subscribe to this video.
And remember, it doesn’t cost a penny to talk!