How Co-Borrowers and Co-Signers Can Help You Qualify for a Mortgage

If you’re struggling to qualify for a mortgage on your own—maybe your income is just shy of the lender’s requirements, or your credit score is holding you back—you might not need to go it alone. A co-borrower or co-signer can help you bridge the gap, especially if that person is your spouse, long-term partner, or a financially stable parent.

But the rules around co-borrowing and co-signing vary widely depending on the loan type—and getting it wrong could cost you. Let’s break down what co-borrowers and co-signers are, how they differ, and what you need to know across FHA, Conventional, VA, and Jumbo mortgages.

What’s the Difference Between a Co-Borrower and a Co-Signer?

A co-borrower is someone who applies for the mortgage alongside you and shares both the responsibility for repayment and ownership of the property. Co-borrowers typically appear on both the loan and the title, meaning they gain equity in the home and are just as liable for payments as the primary borrower.

A co-signer, on the other hand, is financially responsible for the loan but does not have any ownership interest in the property. Co-signers help strengthen the application—especially if the primary borrower has weaker credit or income—but they don’t live in the home or benefit from property appreciation.

Occupancy status matters. If someone is living in the home, they’re usually treated as a co-borrower. If they’re not occupying the home, they may be treated as either a non-occupant co-borrower or a co-signer—depending on the loan program.

For example, FHA loans make a clear distinction: if the person helping you isn’t going to live in the property, they can either be a non-occupant co-borrower (and share title) or a co-signer (with no ownership). However, under FHA guidelines, you can only be a co-signer if you are not living in the home. If you plan to occupy the property, FHA requires that you be listed as a co-borrower, not a co-signer.

Other loan types, like conventional loans, also allow for non-occupying co-borrowers, but they may not draw such a hard line between roles based on whether the person is moving in. Understanding whether someone will live in the home is a crucial first step in determining how they can (and should) appear on the mortgage.

When Does It Make Sense to Add a Co-Borrower or Co-Signer?

One of the most common reasons to bring on a co-borrower or co-signer is to improve your debt-to-income ratio (DTI). DTI compares your total monthly debt payments to your gross monthly income. If your DTI is too high, lenders may view you as a risk—even if your credit score and savings are solid. By adding someone with income and minimal debt, you can reduce the overall DTI and improve your chances of qualifying.

For example, if your income isn't quite enough for the home you want, adding a co-borrower with stable income can significantly reduce your DTI. Say you're at 60% DTI on your own—adding a co-borrower might drop that number to 40%, bringing you well within FHA or Conventional loan guidelines, which typically cap DTI around 43% (sometimes higher with strong compensating factors).

If you're self-employed or have inconsistent income—like commissions, freelance earnings, or contract work—adding a W-2 wage earner as a co-borrower can help stabilize your financial profile in the eyes of underwriters. This is especially useful when applying for Conventional loans, which tend to favor predictable income streams.

That said, if you're a successful self-employed individual with strong bank deposits but limited reportable income on your tax returns, you might not need a co-borrower at all. Instead, you may benefit more from exploring non-QM (non-qualified mortgage) options, such as bank statement loans. These programs use your monthly business or personal bank deposits to calculate income, making it easier to qualify for the home you actually want—without compromising your financial independence.

Finally, if you’re trying to buy more home than your individual profile qualifies for, adding someone else’s income can increase your borrowing power. This is particularly useful in high-cost markets or when taking out a jumbo loan, where income and reserve requirements are stricter.

The most common co-borrowers and co-signers include a spouse (often an occupying co-borrower), a long-term partner (who may or may not live in the home), or a parent, who frequently serves as a non-occupant co-borrower to help children buy their first home.

FHA Loans: Family-Focused Flexibility

FHA loans are known for their accessibility and low down payment requirements. They also allow non-occupant co-borrowers, which can be incredibly helpful if a parent or relative is pitching in.

If your co-borrower is a family member (defined broadly by FHA), you can still qualify with just 3.5% down. If not, you’ll need to put down 25%.

FHA defines "family member" more broadly than many people expect. According to FHA guidelines, the following relationships are considered family members:

• Parents (including stepparents and foster parents)

• Spouses or domestic partners

• Children (including stepchildren, foster children, and adopted children)

• Siblings (including stepsiblings)

• Grandparents (including step-grandparents and foster grandparents)

• Aunts and uncles

• In-laws (including a son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law)

This expanded definition reflects the FHA's mission to support homeownership for low-to-moderate-income buyers by recognizing the diverse ways families provide financial support. The more flexible the definition, the more opportunities borrowers have to bring in trusted individuals who can help them qualify without imposing steep down payment requirements.

FHA co-signers must sign the loan note but not the deed. They don’t get any ownership rights, but they are still financially responsible. All parties must either live in the U.S. or be U.S. citizens.

It’s important to remember that if the co-signer plans to live in the home, they can no longer be treated as a co-signer under FHA guidelines. Instead, they must be listed as a co-borrower, which means they’ll be added to the deed and the mortgage note. This distinction matters because co-borrowers have both legal and financial ownership, while co-signers do not. So if the person helping you will be living in the home, they must take on full co-borrower responsibilities and benefits.

Conventional Loans: Flexibility with Higher Standards

Conventional loans offer more flexibility in who can co-sign or co-borrow—including non-family members—but the credit requirements are stricter.

Non-occupant co-borrowers are allowed, and their income and assets can help you qualify. However, lenders will usually base your approval and interest rate on the lowest median credit score between all applicants. That means even if your co-borrower has excellent income, their lower credit score could affect your pricing—or vice versa.

In addition to credit, lenders assess each borrower's debt-to-income ratio, reserve funds, and employment history. Unlike FHA loans, Conventional underwriting tends to be less forgiving, so both parties should ideally bring strong credentials to the table.

Co-signers—those who help but don’t take title to the property—must still pass full financial underwriting. Here’s what to know:

• They don’t need to be on the title to the home (even if they're an occupant)

• They must meet credit, income, and DTI guidelines

• They take on full legal responsibility for the mortgage if the primary borrower defaults

• Their financial profile will impact loan qualification and terms, even though they don’t benefit from homeownership

While co-signers can help you qualify, the risk they take on is real—and serious. They have zero ownership rights, but 100% of the financial responsibility if things go sideways. That means if you miss a payment, your co-signer’s credit takes a hit too. And if you default, lenders can—and will—come after them for repayment. It’s not just a favor; it’s a legal and financial commitment. So before asking someone to co-sign, make sure they fully understand the consequences and are genuinely prepared to step in if needed.

VA Loans: Strict Rules on Who Can Join the Loan

VA loans are for eligible veterans and active-duty military, and they come with strict eligibility and co-borrower rules that protect VA benefits and ensure the program is used as intended.

• Co-borrowers must be legal spouses or another VA-eligible veteran. A spouse is the most common co-borrower and must occupy the home with the veteran. Both applicants can use their entitlement to increase the loan amount without needing a down payment.

• Buying with a non-spouse who isn’t VA-eligible? You’ll need a joint VA loan, which involves manual underwriting, typically requires a down payment, and may limit the use of your VA entitlement. Not all lenders offer this type of financing.

• Co-signers are not permitted unless they are also VA-eligible and contributing their entitlement. Unlike other loan types, VA does not allow non-veteran co-signers—even close family members—to back a loan they aren't directly benefiting from.

If you're applying for a VA loan, it's important to plan carefully around who will be on the loan, as non-eligible co-signers and co-borrowers are largely excluded under standard VA rules.

Jumbo Loans: Case-by-Case Basis

Jumbo loans exceed the conforming loan limits and are not backed by agencies like Fannie Mae or Freddie Mac, so guidelines vary by lender and tend to be more stringent.

Both co-borrowers and co-signers are typically required to have strong credit (usually 700 or higher), significant verifiable income, and ample cash reserves—often 6–12 months of housing expenses.

Non-occupant co-borrowers are more common in high-cost housing markets, where borrowers may need additional income support to qualify for large loan amounts.

Co-signers may be permitted, but most lenders prefer that they are immediate or close family members, and they must meet the same credit and income standards as a primary borrower. Since jumbo underwriting is entirely discretionary, approval often comes down to the lender’s risk tolerance and how compelling the overall file looks.