It is True. You can use your VA loan with a non-spouse co-borrower who is ALSO not a Veteran.

A VA loan is a government-backed mortgage for a qualifying Veteran or Service member.  In these cases, with a non-spouse co-borrower who is also not a Veteran, they’re usually going to require a down payment of 12.5 percent to 14.5 percent.

Why the strange calculation? The VA typically guarantees, or insures, 25 percent of the Veteran’s loan. Having only one VA-eligible co-borrower on the loan means the lender has only half that guaranty. A down payment for the remainder helps reduce that level of risk.