source:
  type: guide
  id: va-m26-7-ch07-t01
  authority: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 7, Topic 1 — Joint Loans
  description: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 7, Topic 1 — Joint
    Loans.
  coverage_tier: operative
obligations:
- id: va-m26-7-ch07-t01-full
  canonical_id: va-m26-7-ch07-t01-full
  section: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 7, Topic 1 — Joint Loans
  type: do
  tags:
  - regulator-direct
  - va
  - va-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 7, Topic 1 — Joint
      Loans
    source_class: va-handbook
    source_url: https://www.benefits.va.gov/warms/pam26_7.asp
    snapshot_id: 0e2735cf8ca44400
    fetched_at: '2026-05-23T01:53:53Z'
    content_hash: sha256:74297ad4fadd5e592b5688f5567170f8c128f7c9749dd06edd59e735a69099d8
    paragraph_quote: '1. Joint Loans Change Date March 11, 2019 • This chapter has
      been revised in its entirety a. What is a VA Joint Loan? “Joint loan” generally
      refers to a loan for which the: • Veteran and other person(s) are liable, and
      • Veteran and the other obligor(s) own the security. A joint loan is a loan
      made to the: • Veteran and one or more non-Veterans (not spouse), • Veteran
      and one or more Veterans (not spouse) who will not be using their entitlement,
      • Veteran and the Veteran’s spouse who is also a Veteran, and both entitlement
      will be used; or • Veteran and one or more other Veterans (not spouse), all
      of who will use their entitlement. A loan involving a Veteran and his or her
      spouse will not be treated as a “joint loan” if the spouse is: • not a Veteran,
      or • a Veteran who will not be using his or her entitlement on the loan. A loan
      to a Veteran and fiancé who intend to marry prior to loan closing and take title
      as Veteran and spouse will be treated as a loan to a Veteran and spouse (conditioned
      upon their marriage), and not a joint loan. b. Regulations The regulations in
      38 C.F.R. 36.4307 address joint loans. c. Terminology Used in This Section For
      purposes of applying the principles explained in this section, this term will
      also be used to represent any other type of joint loan involving at least one
      Veteran using his or her entitlement, and at least one other person not using
      entitlement (can be a Veteran or a non-Veteran, but not a spouse). Continued
      on next page VA Pamphlet 26-7 Revised Chapter 7: Loans Requiring Special Underwriting,
      Guaranty, and Other Considerations 7-3 1. Joint Loans, continued c. Terminology
      Used in This Section, continued Examples • Three Veterans using entitlement
      and one non-Veteran • One Veteran using entitlement and four non-Veterans •
      Two Veterans using entitlement and two Veterans not using entitlement Two Veterans
      Joint Loan: Commonly meaning a loan involving two Veterans who are not married
      to each other and both are using their entitlement. For purposes of applying
      the principles explained in this section, this term will also be used to represent
      any other type of joint loan involving only Veterans, each of whom uses his
      or her entitlement. This may also include loans to the following: • The Veteran
      and the Veteran’s spouse who is also a Veteran, if both entitlements will be
      used. • Entitlement and funding fees are separate. Funding fees are always calculated
      equally by the number of people on the loan. It is based on each Veteran paying
      their equal share of the loan. • On a Veteran/non-Veteran loan, the funding
      fee is based on half of the base loan amount, downpayment, and sales price for
      the correct funding fee charge. • VA will only guarantee the Veteran’s portion
      of the total loan amount. d. Occupancy The Veteran using entitlement on a joint
      loan must certify intent to personally occupy the property as his or her home.
      e. How Many Units Can the Property Have? 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 unity 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. Continued on next page VA Pamphlet 26-7
      Revised Chapter 7: Loans Requiring Special Underwriting, Guaranty, and Other
      Considerations 7-4 1. Joint Loans, continued e. How Many Units Can the Property
      Have?, continued 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. f. Which Joint Loans
      Require Prior Approval? 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 Veteran’s spouse will
      hold title to the property: whether or not the spouse also uses entitlement,
      may be closed automatically by the lender with automatic authority. This type
      of joint loan does not have to be submitted for prior approval. Continued on
      next page VA Pamphlet 26-7 Revised Chapter 7: Loans Requiring Special Underwriting,
      Guaranty, and Other Considerations 7-5 1. Joint Loans, continued g. How to Underwrite
      a Joint Loan The following underwriting considerations apply: Type of Joint
      Loan Underwriting Considerations Function Two Veteran Joint Loan Consider the
      credit and combined income and assets of both parties. Strengths of one Veteran
      related to income and/or assets may compensate for income/asset weaknesses of
      the other. However, satisfactory credit of one Veteran cannot compensate for
      the other’s poor credit. Veteran/Non-Veteran Joint Loan Veteran’s credit must
      be satisfactory and Veteran’s income must be sufficient to repay that portion
      of the loan allocable to the non-Veteran. The credit of the non-Veteran must
      be satisfactory. However, the combined income of both borrowers can be considered
      in evaluating repayment ability. In other words: • income strength of the Veteran
      may compensate for income weakness of the non-Veteran, but • income strength
      of the non-Veteran cannot compensate for income weakness of the Veteran in analyzing
      the Veteran’s ability to repay his or her allocable portion of the loan. _______________________________________________________________
      h. How to Calculate Guaranty and Entitlement Use on Veteran/Non- Veteran Joint
      Loans Guaranty is limited to that portion of the loan allocable to the Veteran’s
      equal interest in the property. Percentage of entitlement has no bearing on
      the amount of the funding fee to be paid. (See Chapter 8). The lender must satisfy
      itself that the requirements of its investor or the secondary market can be
      met with this limited guaranty. Continued on next page VA Pamphlet 26-7 Revised
      Chapter 7: Loans Requiring Special Underwriting, Guaranty, and Other Considerations
      7-6 1. Joint Loans, continued i. Procedure Step Action 1 Divide the total loan
      amount by the number of borrowers. 2 Multiply the result by the number of Veteran-borrowers
      who will be using entitlement on the loan. There is usually only one Veteran
      borrower, in which case the result of this Step is the same as the result of
      Step 1. 3 Calculate the maximum potential guaranty on the portion of the loan
      arrived at in Step 2 (as if that portion was the total loan). 4 VA will guarantee
      the lesser of: • the maximum potential guaranty amount arrived at in Step 3,
      or • the combined available entitlement of all Veteran-borrowers. 5 VA makes
      a charge to the Veteran-borrower’s available entitlement in the amount of the
      guaranty. If more than one Veteran is involved, VA divides the entitlement charge
      equally between them, if possible. If only unequal entitlement is available,
      unequal charges may be made with the written agreement of the Veterans. Continued
      on next page VA Pamphlet 26-7 Revised Chapter 7: Loans Requiring Special Underwriting,
      Guaranty, and Other Considerations 7-7 1. Joint Loans, continued j. Examples
      Veteran/Non-Veteran Loans Borrowers and Available Entitlement Total Loan Amount
      Veteran’s Portion Maximum Potential Guaranty on Veteran’s Portion Entitlement
      Charge ------------ T=Total Veteran $36,000 Non-Veteran $0 $100,000 $50,000
      $22,500 $22,500 Veteran $36,000 Non-Veteran $0 $290,000 $145,000 $36,250 $36,250
      Veteran $27,500 Veteran $36,000 Non-Veteran $0 $108,000 Total for both Veteran’s
      $72,000 Total for both Veteran’s $28,800 $14,400 $14,400 T=$28,800 Veteran $25,000
      Veteran $11,000 Non-Veteran $0 $201,000 Total for both Veteran’s $134,000 $36,000
      $25,000 $11,000 T=$36,000 Continued on next page VA Pamphlet 26-7 Revised Chapter
      7: Loans Requiring Special Underwriting, Guaranty, and Other Considerations
      7-8 1. Joint Loans, continued j. Examples, continued Note: The last example
      would require a written agreement from the Veterans to make unequal charges
      to their entitlement. Quick Reference For Calculation Used Step Action 1 Divide
      the total loan amount by the number of borrowers. 2 Multiply the result by the
      number of Veterans using entitlement. 3 Calculate the maximum potential guaranty
      on the portion of the loan arrived at in Step 2, using the maximum guaranty
      table in Chapter 3 of this Handbook. 4 VA will make a charge to entitlement
      up to the amount arrived at in Step 3. • VA will divide the charge equally between
      multiple Veterans, if possible. • If Step 2 is greater than $144,000, additional
      entitlement may be added to each Veteran’s entitlement. k. How to Calculate
      Guaranty and Entitlement Use on Two Veteran Joint Loans? As with a non-joint
      loan, the potential maximum guaranty on a joint loan is calculated based on
      the total loan amount. l. Procedure VA calculates the maximum potential guaranty
      on the total loan amount. Continued on next page VA Pamphlet 26-7 Revised Chapter
      7: Loans Requiring Special Underwriting, Guaranty, and Other Considerations
      7-9 1. Joint Loans, continued l. Procedure, continued Step Action 1 Calculate
      the maximum potential guaranty on the total loan amount. Use the maximum guaranty
      table in Chapter 3 of this Handbook. 2 VA will guarantee the lesser of: • the
      maximum potential guaranty amount arrived at in Step 1, or • the combined available
      entitlement of all Veteran-borrowers. If the loan amount is greater than $144,000,
      additional entitlement may be added to each Veteran’s entitlement. If possible,
      VA will use this additional entitlement to arrive at equal entitlement charges
      for the Veterans involved. 3 VA will make charges to the Veterans’ available
      entitlement which total the maximum guaranty arrived at in Step 1, or the total
      of their available entitlement if less than the maximum potential guaranty.
      VA will divide the entitlement charge equally between the Veterans if possible,
      or, if only unequal entitlement is available, unequal charges may be made with
      the Veterans’ written agreement. Exception: VA will make the entitlement charge
      for husband and wife Veterans according to their preference. Continued on next
      page VA Pamphlet 26-7 Revised Chapter 7: Loans Requiring Special Underwriting,
      Guaranty, and Other Considerations 7-10 1. Joint Loans, continued m. Examples
      of Two- Veteran Joint Loans Veterans and Available Entitlement Total Loan Amount
      Maximum Potential Guaranty Total Entitlement Charge Per Veteran Veteran 1 $36,000
      Veteran 2 $36,000 $100,000 $36,000 $18,000 $18,000 Veteran 1 $23,500 Veteran
      2 $ 8,500 $80,000 $32,000 $23,500 $ 8,500 Veteran 1 $36,000 Veteran 2 $36,000
      $300,000 $75,000 $37,500 $37,500 Veteran 1 $15,000 Veteran 2 $20,000 $203,000
      $50,750 $25,375 $25,375 Veteran 1 $0 Veteran 2 $0 Veteran 3 $6,500 $300,000
      $75,000 $25,000 $25,000 $25,000 Continued on next page VA Pamphlet 26-7 Revised
      Chapter 7: Loans Requiring Special Underwriting, Guaranty, and Other Considerations
      7-11 1. Joint Loans, continued m. Examples of Two- Veteran Joint Loans, continued
      A written agreement from the Veterans is required whenever there is unequal
      entitlement usage. o. Certificate of Commitment For joint loans involving one
      or more non-Veterans the: • loan amount shown on the commitment is limited to
      the Veteran’s portion of the loan, and • percentage of guaranty is based on
      the ratio of the amount of entitlement the Veteran has available to the Veteran’s
      portion of the loan. VA will issue the Certificate of Commitment with a reminder
      that: • no part of the guaranty applies to the portion of the loan allocated
      to the non-Veteran, and • in the event of the foreclosure where a loss is sustained,
      the holder must absorb any loss attributable to the non-Veteran’s portion of
      the loan. p. Loan Guaranty Certificate (LGC) The “Amount of Loan” reflects only
      the Veteran’s portion of the loan. If more than one Veteran used entitlement
      on the loan, it will reflect the total of all portions allocable to those Veterans.
      The lender must satisfy itself that the requirements of its investor or the
      secondary market can be met with this limited guaranty. Whereas the whole loan
      amount will appear on the mortgage security documents; that is, mortgage note
      or deed of trust, only the Veteran’s portion is shown on the Certificate of
      Commitment and the LGC. Continued on next page VA Pamphlet 26-7 Revised Chapter
      7: Loans Requiring Special Underwriting, Guaranty, and Other Considerations
      7-12 1. Joint Loans, continued q. Equal Credit Opportunity Act Consideration
      -s (ECOA) The applicability of the guaranty to only a portion of the loan in
      the case of a Veteran/non-Veteran joint loan may cause a lender to refuse to
      accept an application for such loan. This may appear to conflict with the ECOA
      prohibition against discrimination based on marital status; however, the lender
      may refuse the application under these circumstances without violating ECOA.
      This is based on an exemption for VA being a special purpose credit program.
      r. Calculation of the Funding Fee Apply the appropriate funding fee percentage
      to any portion of the loan allocable to a Veteran using his or her entitlement
      who is not exempt from the funding fee. Determine the appropriate percentage
      for the type of Veteran involved from the funding fee tables in Chapter 8. Example.
      On a no-downpayment loan to two Veterans; on a first-time homebuyer; and on
      a subsequent user; the funding fee percentages of 2.15 percent and 3.3 percent
      respectively would each be applied to one-half of the loan amount. No funding
      fee will be assessed on any portion of a joint loan allocable to a: • Non-Veteran
      • Veteran who did not use his or her entitlement, or • Veteran who used his
      or her entitlement, but is exempt from the funding fee. Downpayment. The actual
      loan amount is allocated equally between the borrowers for purposes of calculating
      the funding fee, whether or not a downpayment is made, and regardless of where
      the funds for such a downpayment come from. Example. On a Veteran/non-Veteran
      loan, the non-Veteran makes a $5,000 (five percent) downpayment out of his cash
      resources, to purchase a $100,000 property, resulting in a $95,000 loan amount.
      The Veteran is a first-time homebuyer. The Veteran must pay a funding fee of
      $712.50, based on 1.5 percent of his/her $47,500 portion. If situations arise
      which are not addressed here, contact 1-877-827-3702 for assistance. ______________________________________________________________
      VA Pamphlet 26-7 Revised Chapter 7: Loans Requiring Special Underwriting, Guaranty,
      and Other Considerations 7-13'
  judgment: false
