If you served in the military, you may think that you automatically receive VA benefits. As far as home loan benefits, this isn’t the case. You have to earn the benefits by meeting the VA’s requirements.
Understanding these requirements will help you know if you are eligible for VA home loan benefits or if you will have them coming to you at some point in the future.
How Much Time did you Serve?
The first requirement the VA has is the amount of time you served. Typically, if you served the following, you meet the first part of the eligibility requirements:
- Served 90 consecutive days during wartime
- Served 181 consecutive days during peacetime
- You served more than 6 years in the National Guard or Reserves
The only exception to this rule is if you are a surviving spouse of a veteran that died while in active duty or as a result of his/her active duty. Surviving spouses are also eligible for the VA benefit regardless of the time served.
What Type of Discharge did you Have?
Even if you served enough time in the military, you still have to have the right type of discharge. Technically, this means an honorable discharge. If you had an honorable discharge and you served enough time, there shouldn’t be any issue with you getting your VA home loan benefit. You served as you should and showed that you exhibit exemplary service.
Don’t worry if you don’t or didn’t have an honorable discharge, though. You can also qualify with a general discharge. This means that you completed your time in the military to the satisfaction of your department; you’ll receive this type of discharge. You may have had minor punishments, but nothing was major enough to give you a less than general discharge.
If you received what they call ‘other than honorable discharge’, you will not be able to use your VA home loan benefits. Receiving an other than honorable discharge means that you committed some type of crime or had an incident that ended in court. Whether or not you served jail time, you still had the issue and you won’t have an honorable or even general discharge.
It probably goes without saying that a ‘bad conduct’ discharge also leaves you ineligible for VA home loan benefits. Bad conduct means that you were in court and you probably served prison time. You will not be eligible for VA benefits, nor can you petition to have VA benefits.
How Lenders Know
You probably wonder how lenders even know what type of discharge you had. Can’t you just provide the proof that you were in the military?
VA lenders will ask for what’s called the Form DD-214. This form allows the lender to request your Certificate of Entitlement, which is what they need to provide you with a VA loan. If you don’t have a COE, you won’t be able to get a VA loan.
If you have reason to believe that your records are incorrect and that you should have a COE, you can petition the VA for an adjustment. This process does take a while, as you have to go through the Discharge Review Board in order to have your records changed.
Finding out if you are eligible for a VA home loan is beneficial since the VA provides 100% financing for veterans. If you aren’t eligible, but think you should be, go through the petition process. It may be timely, but it can save you thousands of dollars that you would need for a down payment. It also gives you access to a more flexible loan program that is easier for veterans to qualify for, especially after serving in the military.