I think this can actually be a gray area. I would recommend going to 6%, but the coverage actually applies to a servicemember or a servicemember and their spouse, jointly.
You could argue this isn't a joint loan with the borrower or that the loan was made to the co-signer, and that this protection doesn't apply to them. Reputational risk and the work involved tells me I'd seriously consider 6%, but based on your terms and amounts, you may consider otherwise.
I'm interested in others opinions.
My opinions are not necessarily my employers.
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell