k. How to Calculate Guaranty and Entitlement Use on 2 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 and cannot exceed $60,000, even if the available entitlement of the veterans involved adds up to a greater amount.

l. Procedure

VA calculates the guaranty as described in the table below.

Step

Action

1

Calculate the maximum potential guaranty on the total loan amount.

Use the maximum guaranty table in section 4 of 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 of up to $24,000 may be added to each veteran’s entitlement for use on the loan, if needed.

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 that 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; usually charged to one entitlement, taking it out of the realm of a “joint loan.”