g. How to Underwrite a Joint Loan

The following underwriting considerations apply:

Type of Joint Loan

Underwriting Considerations

Veteran/nonveteran 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 veteran’s interest in the property.

A different analysis applies to the portion of the loan allocable to the nonveteran.  The credit of the nonveteran 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 nonveteran, but

·   income strength of the nonveteran cannot compensate for income weakness of the veteran in analyzing the veteran’s ability to repay his or her allocable portion of the loan.

2 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.