VA loans have numerous benefits for eligible veterans, service members and their spouses who want to buy a home or refinance an existing one. Qualified individuals can get a mortgage with no down payment, low interest rates and no mortgage insurance.
Are you wondering whether to include your spouse on your VA loan application? Were you married to a service member and are now exploring a VA loan for financing? Each situation will vary, so we’ll explore common scenarios and VA loan spouse requirements.
Spousal Income: Is Adding A Civilian Spouse To Your VA Loan A Good Idea?
For couples where one partner is a service member and the other is a civilian – adding your spouse to your application may help. It’s a common worry that a civilian’s income or financial standing may be a problem or won’tcount toward a VA loan. However, a civilian spouse’s income can help and may help you qualify for a larger loan.
Should Your Spouse Co-Sign Your VA Loan?
The Department of Veterans Affairs (VA) allows spouses to co-sign loans. Deciding to apply together or separately should be decided on a case-by-case basis. For example, if your civilian spouse brings in additional income, adding their information to your VA loan application may qualify you for a larger loan.
It’s important to remember that, as for debt-to-income ratio (DTI) and credit history, the VA loan is no different from any other home loan. If your civilian spouse makes more but has poor credit, that may hurt your chances of qualifying for a mortgage.
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VA Loan Requirements For Surviving Spouses
Before the Honoring America’s Veterans and Caring for Camp Lejeune Families Act of 2012, only the surviving spouses of those who died of service-related injuries were allowed to apply for VA loan benefits. Today, the benefit has expanded eligibility.
A surviving spouse can apply for a VA loan when:
- They are a non-remarried surviving spouse of a veteran or service member who died in service or from a service-related disability.
- They are the spouse of a service member who was missing in action or a prisoner of war for at least 90 days.
- They are the surviving spouse of a veteran who was rated totally disabled and was eligible for disability compensation, regardless of the cause of death.
Divorce And VA Loans
Divorce can complicate the process if you took out a VA loan together. Divorce is likely the most complex issue when it comes to civilian spouses. Let’s look at some common scenarios you may experience with VA loans and divorce.
Taking Out A Loan As An Ex-Spouse
If you’re the ex-spouse of a service member, you’re not eligible for a new VA loan. After divorcing a service member, you must use a different loan type to purchase a home.
Occupancy Requirements On Existing Loans
One way that VA loans are different from other types of home loans is that the VA has strict occupancy requirementsthat establish who can and can’t live in a home purchased with a VA loan.
Meeting the occupancy requirement can get tricky when deciding who gets to stay in the home during a divorce.However, if the civilian spouse is a co-signer, they can remain in the home without the service member.
Entitlement On Existing VA Loans
The biggest issue around VA loan entitlement is that a service member can’t restore their entitlement unless their ex-spouse refinances or pays off the VA loan in full. Until that time, the service member will be subject to restrictions when taking out another VA home loan.
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VA Loan Spouse Requirements FAQs
Now that we’ve covered the basics, let’s look at some frequently asked questions about VA loan requirements for military spouses.
Do qualifying surviving spouses need a Certificate of Eligibility (COE)?
Yes, surviving spouses must obtain a COE from the Department of Veterans Affairs. A spouse may also need to provide a marriage certificate or discharge papers to receive a COE.
Does a VA loan require a credit check on my spouse?
Your spouse only undergoes a credit check if they are a co-signer or co-borrower on your VA loan. If not, a lender won’t factor in your spouse’s credit score.
Does my spouse have to be a co-signer on a VA loan?
No, your spouse doesn’t have to co-sign the mortgage or be a co-borrower. You can add their name to the mortgage application for financial or personal reasons. If you aren’t sure whether you should apply together, check with a trusted financial advisor or real estate agent.
The Bottom Line
Whether you’re a spouse, a surviving spouse or an ex-spouse, every situation is different and has its complexities. Knowing the requirements beforehand can help make the application process smoother and increase your chances of approval.
Find out if a VA loan is right for you.
See rates, requirements and beneifts.
Miranda Crace
Miranda Crace is a Staff Writer for Rocket Companies, bringing a wealth of knowledge about mortgages, personal finance, real estate and personal loans for over 10 years. Miranda is dedicated to advancing financial literacy and empowering individuals to achieve their financial and homeownership goals. She graduated from Wayne State University, where she studied PR writing, film production and film editing. In her spare time, Miranda enjoys traveling, actively engages in the entrepreneurial community, and savors a perfectly brewed cup of coffee.
