How Your Military Discharge Can Affect VA Home Loan Eligibility

Types of military discharge and VA loans

Documenting your proof of service is an important step in the VA mortgage process.

As with most military benefits, the nature of your discharge can affect your eligibility for a VA home loan. This isn’t an issue for most veterans. But in certain cases, you may need a more formal review before moving forward.

Let’s take a closer look.

Types of Discharges

You’re generally eligible for VA loan benefits if you’ve served:

  • At least 90 consecutive days on active duty during wartime
  • At least 181 consecutive days on active duty during peacetime
  • Six years in the National Guard or Reserves

Whether you were regular military or in the Reserves or Guard, a key component will be the nature of your discharge.

Generally, three types of discharges may be automatically acceptable to the VA when it comes to evaluating home loan eligibilityHonorable (HON), Under Honorable Conditions (UHC) and General (GEN).

Two types of discharge will require an adjudication review: Other Than Honorable (OTH) and Bad Conduct.

In these situations, so much will depend on the veteran’s unique circumstances. A veteran who deployed and/or fulfilled the term of their service may be in a better position than one who didn’t. It can take the VA several months to make an eligibility determination, which is something to factor into your potential homebuying timeline.

A veteran with a Dishonorable discharge will not be eligible to participate in the VA Loan Guaranty program.

Proof of Service

The most common way to prove military service is with the DD Form 214, the Certificate of Release or Discharge from Active Duty. With this key documentation, the VA is usually able to determine whether you’re eligible. Veterans of the Reserves and National Guard will typically supply an annual retirement points summary.

Active military members will need to submit a statement of service.

Seeking Help

Remember, though, that at the end of the day only the VA can determine whether you’re eligible to utilize the VA loan program.

VA officials will review your military records, along with any supporting documentation you submit. They’ll also consider things like your service history, performance and the nature of the infraction(s).

You can talk directly with your VA Regional Loan Center or check out this character of discharge fact sheet.

It’s also important to remember that being eligible for a VA home loan and actually being able to obtain one represent two different things. Veterans with VA loan entitlement will need to meet credit, financial and other requirements set by both the VA loan program and by lenders.

Take Your Next Step: Find out if you’re eligible today →

Photo courtesy of Carissa Rogers