Can a I Use a Cosigner on a VA Loan?

Many first time home buyers do not qualify to purchase a home by themselves. They ask a friend or family member, called a co-signer in mortgage terms, to purchase the home with them. Using a co-signer who is not a spouse is harder with loans guaranteed by the U.S. Department of Veterans Affairs -- informally known as the VA -- than they are with other loan types. The VA home loan program is designed only for veterans and their families. It's not intended to help non-veterans purchase a home. VA closely monitors all who apply for mortgages that are eligible for the home loan guarantee benefit.



VA encourages veterans to include their spouse on the mortgage when they purchase a home. This benefit is for the veteran and for the veteran's family. In fact, if the veteran died, the widow would still be eligible for the benefit, until the window remarries. A spouse cannot obtain a VA mortgage without the veteran or service member being on the loan however. Although, there are circumstances where both spouses are veterans or active duty service members which changes the rules.


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Spouse who is Also a Veteran

If both spouses are veterans or active duty, they may actually have access to two different VA loans. The VA home loan benefit may be divided into pieces. Each spouse may use half of their benefit to purchase a home today and then if they choose to move into another house later use the other half to purchase another home without refinancing the existing VA mortgage. Typically, VA only provides so much entitlement to each veteran. When the veteran uses all of the entitlement, the loan must be paid off to free up the entitlement for another loan.


Another Non-Related Veteran

Technically, two non-related and non-married veterans could purchase a house together and each use half their benefit for the loan. VA does not lend directly to the veterans, they only guarantee loans to lenders who do. These lenders are able to create their own lending guidelines and may choose to not lend to two different veterans who are not related. The veterans may have to shop their loan with many different lenders until they find one who is willing to lend on their particular situation.


Other Co-signers

VA does not allow other co-signer as who are not veterans or married to a veteran. The veteran may find he does not qualify for a loan without a parent co-signing. This veteran may have to look at other financing options which to allow co-signer as. The Federal Housing Administration provides loans to borrowers who use a cosigner. These loans only require a down payment of 3.5 percent. The co-signer should be a related to the borrower as a parent, grandparent or other blood relative.