Does a Military Discharge Affect VA Loan Eligibility?
As you may have assumed, discharge conditions can affect a veteran’s eligibility for a VA loan. Veterans with a dishonorable discharge may not be not meet VA Loan Eligibility.
If your discharge state is “other than honorable” or was changed, modified or corrected you may be able to pursue an appeal with the help of the local VA office. Be sure to have copies of your DD214 – Condition of Discharge form and any documentation clarifying conditions or changes in your discharge status. Lenders may not be familiar with the process so getting assistance from the VA is advised.
The Veteran’s Affairs Home Loan Program was designed to help anyone who has served in the Military and meets the VA loan eligibility or Certificate of Eligibility requirements set out by the department of veterans affairs in order to secure the necessary financing to buy or refinance a home. For many people who have served in the armed forces getting approved for a home loan can be difficult because of factors like relocation, short credit history and weak credit history.
Most VA lenders understand this situation and are more flexible about extending loans based on the guarantee that is supported by Veteran Affairs. However, there are circumstances that can derail your attempts to get home purchase financing:
Other Than Honorable Discharges
In cases where you have been honorably discharged you will meet the certificate of eligibility for the loan you are applying for based on your ability to make those mortgage payments and your financial history.
There is a section of the type of discharges called “other than honorable.” In this case you may have been discharged from the Military for a minor offense that did not end up as a dishonorable discharge. In these circumstances you have to go through an additional process to get your certificate of eligibility by supplying your DD214 and additional documentation to prove your discharge was not dishonorable. You will have to validate the reasons of your discharge, change of status or appeals you may have had to go through to avoid dishonorable discharge. The easiest way to deal with this is to go directly to your local VA office for assistance in this matter.
Implications of a Dishonorable Discharge
If you have an offense leading to a dishonorable discharge, you will be declined for the VA loan eligibility in most cases unless you can win an appeal on your release from the department of veteran affairs.
You will not be able to apply for any government assisted loans for housing. If this is the case, you have the possibility for conventional loan options where you will need to have a good credit score and financial history with a debt to income ratio less than 43% to be able to secure a home loan.
If this is your situation, reach out to us and will help you to find the right loan to fit your situation.