Announcement 2025-040 VA Loans: Reminders When Calculating the Maximum Mortgage Amount on a Joint Loan
Newrez LLC "Newrez" Approved Correspondent Clients; Newrez is reminding all Clients when originating a VA Joint Loan, especially a joint loan with a veteran and one (1) or more non-Veterans (who is not the Veteran’s spouse), the VA will only guarantee a portion of the total loan that is allocated to the Veteran.
Where there is a Joint Loan with a non-Veteran (non-spouse); the VA guaranty amount will be insufficient for 100% financing. To meet secondary market requirements the VA guaranty and down payment/equity must be no less than 25%.
Things to consider:
- VA only guarantees the Veteran’s portion of the loan. Neither the VA Prior Loan Approval Commitment nor the Loan Guaranty Certificate (LGC) are confirmation that Ginnie Mae’s guaranty has been met.
- To meet Ginnie Mae requirements, loans must have at least 25% VA Loan Guaranty and/or down payment or equity, based on the sales price or appraised value, whichever is less.
- Any down payment is allocated equally between borrowers.
When originating a VA loan, we strongly encourage using a worksheet to determine the 25% Ginnie Mae guaranty has been met. Newrez Clients can access a VA maximum mortgage calculation worksheet under the Forms Library on the Newrez Correspondent website via newrezcorrespondent.com or can utilize another valid worksheet. VA loans that do not meet Ginnie Mae’s requirement for 25% guaranty are ineligible.
See attached completed max mortgage worksheet for loan scenario example.
Complete guidelines can be found in the VA Underwriting Guide Chapter 3A, Eligibility, in following sections:
- 15 (e) Calculating the Guaranty
- 16 Calculating the Guaranty of Joint Loans
- 17 Examples for Calculating Guaranty Amount and Guaranty Percentage.