VA loans between two or more veterans are called "joint loans". Specifically, the VA Lender's Handbook describes joint loans in Chapter Seven as, "A loan involving two veterans who are not married to each other, and both using their entitlement." A VA joint loan can also mean, "any other type of joint loan involving only veterans, each of whom uses his or her entitlement."
Chapter Seven adds, "It can include loans to:
- the veteran and the veteran’s spouse who is also a veteran, if both entitlements will be used, or
- three, four, or more veterans, all of whom will use their entitlement."
Joint loans have slightly different rules when it comes to the type of property that can be purchased. For an individual VA loan applicant, the VA loan may be for a single-family home or a property with up to four living units. But when it comes to a VA joint loan between two or more veterans who are both/all using VA loan entitlement, VA loan rules allow the following:
"If a property is to be owned by two or more eligible veterans, it may consist of four family units and one business unit, plus one additional unit for each veteran participating in the ownership. Thus, two veterans may purchase or construct residential property consisting of up to six family units (the basic four units plus one unit for each of the two veterans), and one business unit."
The business unit issue is important, as Chapter Seven points out. "If the property contains more than four family units plus one family unit for each veteran participating in the ownership and/or more than one business unit, the loan is not eligible for guaranty."
VA joint loans require occupancy from all borrowers using VA loan entitlement on the mortgage.
When it comes to prior approval or automatic approval of the loan from the lender's standpoint, VA loan rules state, "Any joint loan for which the veteran will hold title to the property and any person other than the veteran’s spouse must be submitted for prior approval. Any loan for which the veteran and the veteran’s spouse will hold title to the property, whether or not the spouse also uses entitlement, may be closed automatically by a lender with automatic authority."
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