How Your Military Discharge Can Affect VA Home Loan Eligibility

Whether you're a Marine, Soldier or Airman, your military discharge can directly impact your access to the VA home loan benefit. While most Veterans with honorable or general discharges are eligible without issue, others may require additional review.

Let’s explore which military discharge scenarios qualify for a VA loan and what options you may have if yours requires extra steps.

Acceptable Discharge Scenarios for VA Loans

Eligibility for the VA home loan benefit can depend on when you served, the nature of your service (Regular Military or Guard/Reserve), the reason for your separation and more.

Generally, you may be eligible for VA loan benefits if you 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

No matter if you were regular military, the Guard or Reserves, a key component of eligibility is the nature of your discharge.

Two types of discharges are automatically considered acceptable for VA home loan eligibility: Honorable (HON) and General (Under Honorable Conditions).

Generally, Veterans who served at least 90 consecutive days are eligible if discharged for one of the following reasons:

• Hardship
• Early out
• Convenience of the government
• Reduction in force
• Condition interfered with duty
• Compensable service-connected disability

Veterans who served fewer than 90 days but were discharged due to a service-connected disability may also be eligible for a VA loan. For example, if you are a Marine who lost functionality in one or both legs during service. In that case, you may still qualify for a VA loan even if you don’t technically meet any of the criteria listed above.

This table details the different types of discharge, as well as which ones allow for VA loan eligibility:

Discharge Types Requiring Review

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

In these situations, so much depends on the Veteran's unique circumstances. A Veteran who deployed and/or fulfilled the term of their service may be better positioned than one who didn't.

It can take the VA several months to make an eligibility determination, so factor that into your potential homebuying timeline.

On June 25, 2024, the VA amended the guidelines surrounding benefits for Veterans who have an OTH discharge, saying that “compelling circumstances” would be evaluated for VA loan consideration. Previously, being discharged with OTH meant being prohibited from accessing most VA benefits.

Dishonorable Discharge

Veteran status requires that service members be discharged or released from the military under conditions other than dishonorable.

A Veteran with a dishonorable discharge will not be eligible to participate in the VA loan guaranty program.

Proof of Military Service and Discharge Type

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 can usually determine your eligibility. Veterans of the Reserves and National Guard typically supply an annual retirement points summary, and active military members submit a statement of service.

Veterans and service members who meet eligibility guidelines are issued a Certificate of Eligibility (COE) from the VA. While you don't need it in hand to start the homebuying process, lenders need a copy of your COE before you can close on a VA loan. Veterans United can easily get your COE for you if required.