Can a Non-Spouse be on Title on a VA Loan?

Title ownership on a VA loan is a critical aspect of the home-buying process for veterans and service members. While VA loans offer several advantages, such as no down payment requirements and competitive interest rates, it’s essential to understand the rules and limitations surrounding title ownership, particularly when it comes to including non-spouse individuals.

The short answer is yes, a non-spouse can be on the title of a property purchased using a VA loan. However, some specific guidelines and conditions must be met to make this possible. It’s crucial to comprehend these rules to avoid any potential complications and ensure a smooth home-buying process.

1. Eligible Co-Borrowers: The Department of Veterans Affairs allows veterans and service members to have co-borrowers on their VA loans. These co-borrowers don’t have to be married to the veteran or service member, but they must meet certain eligibility criteria. Eligible co-borrowers include other veterans or active-duty service members, as well as civilian spouses. Other non-spouse individuals, such as friends or family members, are generally not eligible to be co-borrowers on a VA loan.
2. Income and Credit Considerations: When a non-spouse is included as a co-borrower, their income and credit history will also be considered during the loan application process. Lenders will assess their financial stability to determine if they meet the requirements to qualify for the VA loan.
3. Entitlement Usage: VA loans are subject to a maximum loan limit, which is linked to the borrower’s VA loan entitlement. When a non-spouse is on the loan, it affects how much entitlement can be used by the veteran or service member. This could potentially limit their ability to get another VA loan in the future until the current loan is paid off.
4. Ownership Share: When a non-spouse is on the title, they will have legal ownership rights to the property, just like the veteran or service member. The ownership share may be divided based on the financial contribution of each party or as agreed upon during the home-buying process. This also means that the non-spouse co-borrower will be responsible for the mortgage payments.
5. Future Implications: It’s important to consider the long-term implications of adding a non-spouse to the title. If the relationship between the veteran and the non-spouse co-borrower changes, it can lead to complicated legal situations and may require refinancing or selling the property to remove the co-borrower from the loan.

In summary, a non-spouse can be on the title of a property purchased with a VA loan, but only as an eligible co-borrower. This typically includes other veterans, active-duty service members, or civilian spouses. It’s essential to carefully consider the implications of having a non-spouse on the title and consult with a qualified VA loan specialist or legal professional to ensure compliance with all VA loan regulations and to make an informed decision. As with any major financial transaction, it’s wise to approach the process with careful consideration and seek expert advice when needed.