Your buyers don't have an honorable discharge can they get a VA loan?

Real Estate Agent with Semper Find My Home SA649708000

The nature of your clients' discharge can greatly affect weather or not they can utilize the VA to obtain a loan for the swanky new house they're looking at.  The Certificate Of Eligibility (COE) gets even more complicated when one or both of your home buyers were discharged under "other than honorable conditions."  The short answer is they are not disqualified from purchasing a home, but they will need to "upgrade the discharge" that will change the character of service on their DD-214 which directly impacts their VA benefits.  You can take a look here at the process and information needed. Basically they apply to a Defense Review Board by Service.  The law also states they have 15 years to apply from their discharge date.  If it's past 15 years they must apply for a change to military records.  An even more difficult and lengthy process

Today most certificates show discharges in one of these ways:VA home loan benefits

  • Honorable
  • General (Under Honorable Conditions)
  • Other than Honorable
  • Bad Conduct or Dishonorable

If your first time home buyers are attempting to buy their house using a VA loan and want to upgrade their discharge, they'll need to take action ASAP.  They need to understand what they're facing and so do you as an agent, the process is lengthy and statistically the odds are against them and most applications are denied.  If I was the agent and they wanted to continue looking, I'd recommend we keep looking, however, I'd highly recommend they try to get financing using a conventional loan if they wanted to purchase a home lickety split.  Conversely, I'd probably tell them to focus on getting their VA status changed if they're hell bent on getting a VA loan and put home looking on hold while working their way through the process.  

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This Active Rain post is by Alex Popovic, for all your real estate needs please call 602-290-4266.

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Alex Popovic Real Estate Agent Phoenix, AZ (602) 290-4266

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Dan Hopper
Keller Williams Realty Downtown LLC - Denver, CO
Denver Realtor / Author / Advocate/Short Sale

Good info, Alex.  We are seeing more Vets with those kind of issues.

Feb 20, 2014 12:31 AM #1
Alex Popovic MRP
Semper Find My Home - Phoenix, AZ


Statistically it will happen, just because there are so many more veterans returning to civilian life.  Thanks for reading.

Feb 20, 2014 12:38 AM #2
ReadySetLoan Condo Approval Team
ReadySetLoan Condo Team LLC - South Windsor, CT
The FHA/VA Condo Project Approval Specialists

That's a great article.  Luckily, I never ran into this when I was writing VA loans.  It used to take months to get a Cert of Eligibility before the electronic system.  I can't imagine how long this process will take!

Feb 20, 2014 12:56 AM #3
Alex Popovic MRP
Semper Find My Home - Phoenix, AZ


It's lenghty, on the short end a year on the long end...years.  I've got a Navy SEAL buddy who had a bad discharge and he's been trying to get back in after leaving the service and it's been a nightmare.  

Feb 20, 2014 01:08 AM #4
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Alex Popovic MRP

Alex, Phoenix is huge can you help us find a place
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