VA Loan Refinancing
Refinance loans and new purchase home loans alike under the VA loan program require the borrower to be eligible for the loan with minimum time in service and/or military discharge requirements. You must serve a minimum time in uniform which varies depending on when you joined and the type of military service you have—Guard, Reserve, or Active Duty.
Any qualified veteran or qualified currently serving military member is permitted to apply, but many have questions about having other borrowers either included on the loan or applying for a home loan on the veteran’s behalf.
VA loan rules basically require the eligible veteran to apply--a married couple can apply together on a VA loan and be treated the same, but any non-spouse co-borrower would not be covered under the VA loan guaranty, though the veteran and non-veteran can apply together with a VA Joint Loan.
Basically, if you view the VA loan rules on this subject in general terms--the veteran must be a participant and except in very limited cases involving surviving spouses of military members--there is no way for a non-veteran to apply for a VA home loan alone. That includes divorced couples where there’s one civilian spouse.
Refinance loan rules are the same--the participation of the veteran borrower is key. In all cases the eligible veteran must be involved in the loan except for a couple of exceptions may involve either loan assumption or a surviving spouse of a military who has died.
There’s one situation where a non-veteran can take over the financial obligation of a VA home loan. VA loan rules permit a non-veteran to assume the VA loan from the veteran, as long as there is participation from the lender. VA loan assumptions require the person assuming the loan to credit qualify the same as the original borrower, but aside from that requirement, here’s a unique situation where the veteran can pass off the loan to a non-veteran.
Those who do so must take care to inquire about the status of their financial obligation in case of loan default or foreclosure--the veteran may or may not be relieved of any/all obligation in such cases, depending on what’s been put into writing in the contract of the loan assumption or the associated paperwork.