VA loans are a great mortgage option for qualifying service members and Veterans, but what happens when you are discharged from the service?. You may have heard that an honorable discharge is required for VA loan eligibility, but is that really the truth?
Here, we'll get into all the details you need to know.
What are the VA Loan Honorable Discharge Requirements?
The Department of Veteran Affairs considers your character of discharge as part of the eligibility evaluation.
Getting a Certificate of Eligibility (COE) for a VA loan depends on three factors — the type of qualifying service an applicant performed, their length of service, and the nature of their discharge or separation if applicable.
Do I Need an Honorable Discharge for a VA Loan?
It's important to note that the requirement to get a VA loan does not say you must have an honorable discharge. Instead, it says the Veteran's character of discharge or service can't have been under dishonorable conditions.
While that might seem like the same thing at first, there's an important difference between the two. More than two types of discharges exist. Some automatically qualify for VA loan benefits while others don't.
Which Discharge Types Qualify for a VA Loan?
Typically, honorable (HON), under honorable conditions (UHC) and general discharge (GEN) circumstances will keep you eligible for a VA loan. Let’s break down each type of discharge and how it will impact your eligibility.
VA Loan Eligible Discharge Conditions
| VA Loan-Eligible Discharge Types | VA Loan-Ineligible Discharge Types |
|---|---|
| Honorable | Other Than Honorable |
| Under Honorable Conditions | Bad Conduct |
| General | Dishonorable |
Administrative Discharges
Administrative discharges are given by an officer with discharge authority such as a high-ranking commanding officer. Here are the different types:
- Honorable Discharge (HON): You met all of the standards of performance and conduct while you were enlisted. Most receive this type of discharge when their service ends.
- General Discharge (GEN) Under Honorable Conditions (UHC): A discharge type for those whose service was honest and faithful but was not without some type of failure to maintain standards (such as behavior, weight, fitness, dress or appearance).
- Other Than Honorable (OTH): This is the poorest administrative discharge type you can receive, and it's given for a pattern of bad behavior such as abusing authority, serious misconduct or fraternization.
- Uncharacterized/Entry-level Separation: If you try but don't make it through basic training or the period immediately following, you will receive this form of discharge. It's not positive or negative and usually means your service wasn't long enough to characterize another discharge type. In this case, you typically won't meet the service requirement for a VA loan.
Punitive Discharges
Punitive discharges are given by a general or special court-martial, and include:
- Bad Conduct: This discharge type is part of a court punishment given when enlisted personnel are convicted of acts such as writing bad checks, disorderly conduct, driving under the influence or being absent without leave.
- Dismissal: If an officer is convicted of bad conduct, a special or general court often dismisses such charges along with the maximum punishment for the crime.
- Dishonorable Discharge: The worst discharge type, this is only given for the highest offenses which can often be accompanied by a military prison sentence.
VA Home Loan Eligibility Rules Without an Honorable Discharge
If you don't have a qualifying discharge type, you're not completely out of luck. If you request further considerations, the VA may still grant you a COE through the following actions.
Discharge Upgrades and Changes
All of the military branches have a review board that holds the authority to change dismissals or discharges. You'll need to apply by filling out the designated form for your type of service and situation. You'll typically need to send in supporting documents, which will be described when you get your form. If successful, your discharge will be upgraded to honorable status and you'll be immediately eligible for a VA loan.
VA Character of Discharge Review Process
If you don't receive a discharge upgrade, you can still participate in the Character of Discharge review process. During this procedure, the VA will review your record to decide if it can be considered "honorable for VA purposes." It's best to provide documents supporting your case, including military records, statements from friends or colleagues and testaments of your achievements since leaving the service. You can also hire a lawyer or contact a Veterans Service Organization (VSO) to represent you.
You can also request a Character of Discharge review while simultaneously applying for a discharge upgrade.
VA Loans and Other Than Honorable Discharges
Other than honorable discharges are not considered honorable so they don't qualify automatically for a VA loan. However, you can apply for a discharge upgrade and a Character of Discharge review to attempt to gain VA loan eligibility. Note, cases that involve mental health conditions like PTSD, sexual harassment or assault or harassment during service, traumatic brain injury (TBI) or sexual orientation typically have a strong likelihood of getting approved.
Wrap-Up: You Can Get a VA Loan Without an Honorable Discharge
If you're looking to get a VA loan, you don't necessarily need an honorable discharge. However, your discharge type can't be considered dishonorable if you want to use your VA home loan benefit. If it is, you can attempt to get it changed so you can qualify through a discharge upgrade request or Character of Discharge review.
