VA Loan Eligiblity: Other Than Honorable Military Discharges

Mortgage and Lending with Real -Time Dashboard FHA Mortgage Leads / Managing Editor

A reader asks, “I have an Other Than Honorable discharge. Can I still get a VA loan?”

The Department of Veterans Affairs has a page outlining VA eligibility rules at the VA official site, called General Rules For Eligibility. Navigating these rules can be a bit tricky as VA loan eligibility is different for those who served in the military at different times. For example, the page breaks down military service into periods such as World War II, the Korean War era, Vietnam, Desert Storm, etc.

One common thread found in many of these eras is a requirement for VA loan eligibility that is dependent on the nature of a veteran’s discharge. For example, many of the earlier service periods require the veteran to have a discharge characterized as “other than dishonorable”.

To non-veterans, this distinction may be confusing. This is due in part to the nature of military discharges–they aren’t necessarily categorized neatly into “honorable” and “dishonorable” discharges. There are medical discharges, something known as the administrative separation, discharges under other than honorable conditions, and a few other types. Some discharges aren’t classified as honorable or dishonorable because they are viewed as “separations”, sometimes involving a servicemember who hasn’t completed basic training or technical training yet.

The basic answer to the reader question is that the Department of Veterans Affairs does process and approve loan applications by veterans with Other Than Honorable discharges, but it does issue this caveat:

“Applications involving other than honorable discharges will usually require further development by VA.  This is necessary to determine if the service was under other than dishonorable conditions.” So while that “further development” may take some extra time, the VA does not automatically reject a VA loan application on the ground that the veteran wasn’t honorably discharged.

Additionally, the VA has posted VA loan eligibility criteria which apply to those who have served on or after 08-02-1990 to a “date yet to be determined”. Those rules say anyone who has served after 8/2/1990 must have:

“Completed 24 months of continuous active duty or the full period (at least 90 days) for which you were called or ordered to active duty, and been discharged under conditions other than dishonorable, or

Completed at least 90 days of active duty and been discharged under the specific authority of 10 USC 1173 (Hardship), or 10 USC 1173 (Early Out), or have been determined to have a compensable service-connected disability, or

Been discharged with less than 90 days of service for a service-connected disability. Individuals may also be eligible if they were released from active duty due to an involuntary reduction in force, certain medical conditions, or, in some instances, for the convenience of the Government.”

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