VA Loans and Other Than Honorable Discharges

There 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.