Can A Gay Couple Get A VA Mortgage?

For a number of years voters have rejected marriage equality, the idea that gay couples could have the same civil recognition as straight couples. But with the most recent election there has been a visible evolution in public attitudes: After more than 30 losses on state ballots, the civil recognition of gay marriage was approved in 2012 by voters in Maryland, Maine and Washington while an effort to bar gay marriage in Minnesota was rejected.

Changing public values do not necessarily mean past practices have evolved. For instance, those with qualifying military service are entitled to certain benefits. One major exception concerns VA mortgages where there are different rules for straight and gay couples.

Policy in this area is established by Congress and the VA must follow the directions laid out for it. Under federal guidelines the rules for marital status required to qualify for VA financing look like this:

  • An individual with qualifying military services can get a VA mortgage.
  • If married, a man and a woman can get a VA loan, even if only one spouse has qualifying military service.
  • Two unmarried individuals can jointly get a VA mortgage, however the amount of the VA guarantee depends on whether one or both prospective borrowers have qualifying military service.

Under federal policy regarding VA loans, a “spouse” must be someone of the opposite sex thus a gay couple would not be able to apply for a VA mortgage in the same sense as a married couple which includes both a woman and a man.

However, a same-sex couple would be able to get a VA mortgage under the rules which apply to joint financing. The catch is that joint applicants might not be able to get as much financing as a married couple with a man and a woman unless both applicants have qualifying military service.

Current VA Policies

The VA, in a response to an OurBroker.com inquiry, said:

“Federal law controls VA policy in this area. Section 101 of Title 38 of the United States Code sets out the definitions VA must use to determine eligibility for Veterans benefits. Pursuant to paragraphs (3) and (31) of this section, the definitions of ‘surviving spouse’ and ‘spouse’ require that the individual must be a ‘person of the opposite sex.’

“That said, VA nonetheless can guarantee a loan made to a single Veteran, a Veteran and spouse, or a Veteran and another person who is not his or her spouse. The VA guarantee, which is protection for the lender, is applied to the whole loan when the borrower is a single vet or a Veteran and spouse.

“When a Veteran obtains a loan with someone other than his or her spouse, and that person is not a Veteran, VA can only guarantee the portion of the loan allocable to the Veteran. For example, assume two unmarried persons, one a Veteran and one not, are seeking a loan of $200,000. This is considered a joint loan and requires a lender to submit the application to a VA office for approval. Chapter 7 of the VA Lenders Handbook has a complete discussion of joint loans. In this example the VA guaranty would only apply to the Veteran’s half of the loan, or $100,000.

“Two unmarried Veterans obtaining a loan is also considered a joint loan, but in this case, assuming both Veterans have entitlement, the VA guaranty would apply to the whole loan and thus should not be an issue for a lender.”

Will Federal Rules Change?

It is possible that the rules as they now stand could be changed.

First, new laws could be written, an unlikely scenario in the near future given the political divide on Capitol Hil but an increasingly-likely option at the state level.

Second, there could be a Supreme Court ruling which either denies or affirms the right of gay marriage.

As Politico explains, in the coming term there could be “five separate Defense of Marriage Act challenges that could be rolled together, the constitutional challenge to California’s Proposition 8 and the case challenging Arizona Gov. Jan Brewer’s attempt to stop gay couples from receiving domestic partnership benefits.”


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