VA requirements

VA Loans and Other Than Honorable Discharges

February 11, 2019

VA Loans and Other Than Honorable Discharges

va loanThere are several different ways a military member can leave the service. One is to complete 20 years or more of service and apply for military retirement.

Another is to simply allow the current term of enlistment to expire without re-enlisting. Another way is to be given a discharge by the military for any number of reasons–there are medical discharges, discharges performed for the convenience of the government, even punitive discharges in cases where a military member has been found guilty of wrongdoing and the government chooses to expel the member from service.

No matter how the military member leaves the service of his or her country, the discharge must be characterized. The best known categorizations are Honorable and Dishonorable, but there are many shades of grey in between.

When it comes to applying for a VA home loan, veterans may still be eligible, contrary to popular belief, for benefits even if the discharge received is not categorized as an honorable discharge. Specifically, the Department of Veterans Affairs states that people with dishonorable discharges are not eligible, but all others may be considered on a case-by-case basis.

“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, what’s important for VA loan applicants to keep in mind with regard to this rule? Some discharges, even those categorized as dishonorable, may have their status changed by the government. Veterans can challenge the categorization of their discharge by applying to have it examined by a discharge review board.

In cases where such a board upgrades the discharge, veterans have the potential to take advantage of VA benefits previously denied to them by the original discharge.

VA loan applicants should handle the discharge review board issue first before attempting to apply for a VA loan as whatever is reflected on the current record will be used to determine VA loan eligibility. Once a discharge review board has upgraded a member’s record, it may take several weeks or months for that change to be reflected in government files, so it’s best to give plenty of time between the review and a VA loan application.

There are many reasons why a discharge review board could change and upgrade a dishonorable discharge. Additional evidence may come to light that weighs in the military member’s favor; old laws could be repealed, overturned or found unconstitutional, etc. An upgraded discharge is a second chance for some to use VA benefits, including VA insured loans, but the process does take time to work through.

20 Comments
  1. Mario lopez

    I received an other than honorable discharge, can I still get a VA loan

    • Joe Wallace

      Hi Mario, thanks for your question. Your best bet is to inquire directly to the VA about your specific discharge and whether you'd be eligible.

  2. ru mack

    I made one mistake and I feel I can't get that monkey off my back. I have gained two degrees but can not get my OTH changed.. I need some help or guidance in doing so.

    • Joe Wallace

      Have you approached the VA about the procedures for requesting a discharge review board?

  3. John

    I never failed a drug test while or after the my service in the Navy, but admitted to using drugs to them, and I was discharged with an Other Than Honorable discharge. Will that prevent me from getting a VA Loan or obtaining a Certificate of eligibility?

    • Joe Wallace

      In many cases VA loans are available to all qualified borrowers with discharges characterized as anything but dishonorable.

  4. ricardo zavala

    Received OTH after 20 years and 2 months of service sought legal counsel but its a 30 thousand whole that I can't afford having a family of seven....any other avenues... I have already done all the leg work and have all documents needed to challenge board just need legal counsel to make it right...any info and direction will be appreciated

    • Joe Wallace

      Are you asking about whether you need a DRB result in order to apply for a VA home loan? Or are you asking about DRBs in general? We can only offer advice on VA loans as we're a private company and not affiliated with the Department of Veterans Affairs. If you need assistance with a discharge review board, please contact the VA directly at 1-800 827-1000.

  5. Jason

    If you get an approved COE and buy a house using the VA home loan, then receive and OTH discharge, will that effect the loan at all?

    • Joe Wallace

      As mentioned in the article, "When it comes to applying for a VA home loan, veterans may still be eligible--contrary to popular belief--for benefits even if the discharge received is not categorized as an honorable discharge. Specifically, the Department of Veterans Affairs states that people with dishonorable discharges are not eligible, but all others may be considered on a case-by-case basis."

  6. Erin

    NGB Form 22 box 24 honorably discharge Box 23 reason drug abuse. CAn i still get VA home loan. I do have 6+ years of sevice

    • Joe Wallace

      If your discharge was not characterized as dishonorable, and you otherwise qualify for a VA loan, it may be possible.

  7. Rob Jefferson

    Box 23 on my DD214 states "Discharged" . I served 1yr and 2 months, my status was "Under Honorable Conditions (general)" Where I applied to get my COE, I was told I would be denied because in box 23 it needed to state more than just discharge, can I get a VA Loan still?

    • Joe Wallace

      Contact the VA directly for assistance by calling 1-800 827-1000.

  8. David Avery

    I have received my COE and have applied for a VA loan, I am getting a copy of my dd214, but I know I was discharged as OTH. I have the length of service. Question is can you be issued a COE and then still get denied because of an OTH?

    • Joe Wallace

      A borrower is eligible for a VA home loan with any type of military discharge EXCEPT dishonorable, provided the other requirements of the VA loan program are met for time in service, credit, etc.

  9. dan

    not directly related to loans but you seem informative and either may be able to answer or point me in the right direction...I did receive an OTH and it's stated for drug abuse. well, i had also previously completed a 5 year enlistment under honorable conditions, i was 2 years into my 2nd enlistment. i know i am eligible for disabilty and the gi bill but have never inquired about healthcare and now have no insurance...is there any way that i may be missing out on the va healthcare or am i inellible?

    • Joe Wallace

      You should contact the Department of Veterans Affairs for assistance with this question by calling 1-800 827-1000.

  10. Chris Reynolds

    Already used VA loan for house but got dishonorable discharge. what will happen with my VA loan and my payments?

    • Joe Wallace

      Unless you specifically hear otherwise from the VA, you should continue making your payments as usual--if the loan has already been approved and the deal has been closed, there should be no changes to your status unless the VA specifically states otherwise.

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