Military Service Requirements for VA Loans

With a VA loan, eligible borrowers can get a low-interest mortgage with no money down. Unfortunately, though, not all service members qualify for this benefit. As such, we’ll use this article to outline the military service requirements for VA loans.

Specifically, we’ll discuss the following:

• VA Loan Overview
• VA Loan Military Service Requirements for Veterans and Active Duty
• VA Loan Military Service Requirements for National Guard and Reserve
• What if I Don’t Meet the Minimum Military Service Requirements for a VA Loan?
• VA Loan and Discharge Status
• Final Thoughts

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VA Loan Overview

The Department of Veterans Affairs administers the VA home loan program. However, the VA doesn’t actually originate these loans. Instead, it guarantees the loans provided by VA-approved lenders (e.g. banks, credit unions, and mortgage lenders). If a borrower defaults on a loan, the VA will reimburse these lenders a portion of the outstanding loan balance. This guarantee significantly reduces lending risk, and this reduced risk allows lenders to offer the following outstanding VA loan terms:

• No down payment required
• No private mortgage insurance (PMI) required
• Low interest rates
• Streamlined refinancing option via the Interest Rate Reduction Refinance Loan (IRRRL)

However, not all troops meet the military service requirements for VA loan eligibility.

The VA Loan COE

If eligible, borrowers can apply for and receive a Certificate of Eligibility, or COE, from the VA. This certificate tells lenders A) that you meet the military service requirements for VA loan benefits, and B) how much remaining eligibility – or entitlement – you have. Borrowers can either request their COE from the VA directly, or they can ask their lenders to request it on their behalf.

In the following sections, we’ll explain the different ways that borrowers can meet the military service requirements for VA loans. This eligibility largely centers on the character of a veteran’s service.

VA Loan Military Service Requirements for Veterans and Active Duty

Veterans

For veterans, eligibility hinges upon both when you served and how you served. Depending on your particular dates of service, you will qualify for VA home loan eligibility if you meet your respective military service requirements outlined below:

Between Sept. 16, 1940 and July 25, 1947 (WWII):

• 90 total days, or
• Less than 90 days if you were discharged for a service-connected disability

Between July 26, 1947 and June 26, 1950 (post-WWII period):

• 181 continuous days, or
• Less than 181 days if you were discharged for a service-connected disability

Between June 27, 1950 and Jan. 31, 1955 (Korean War):

• 90 total days, or
• Less than 90 days if you were discharged for a service-connected disability

Between Feb. 1, 1955 and Aug. 4, 1964 (post-Korean War period):

• 181 continuous days, or
• Less than 181 days if you were discharged for a service-connected disability

Between Aug. 5, 1964 and May 7, 1975 (Vietnam War), or Feb. 28, 1961 to May 7, 1975, if you served in the Republic of Vietnam:

• 90 total days, or
• Less than 90 days if you were discharged for a service-connected disability

Between May 8, 1975 and Sept. 7, 1980 (post-Vietnam War period), or Between May 8, 1975 and Oct. 16, 1981, if you served as an officer:

• 181 continuous days, or
• Less than 181 days if you were discharged for a service-connected disability

Between Sept. 8, 1980 and Aug. 1, 1990, or Between Oct. 17, 1981 and Aug. 1, 1990, if you served as an officer:

• 24 continuous months, or
• The full period (at least 181 days) for which you were called to active duty

Between Aug. 2, 1990 and the present (Gulf War):

• 24 continuous months, or
• The full period (at least 90 days) for which you were called or ordered to active duty, or
• At least 90 days if you were discharged for a hardship, a reduction in force, or for convenience of the government, or
• Less than 90 days if you were discharged for a service-connected disability

You separated from service after Sept. 7, 1980, or After Oct. 16, 1981, if you served as an officer:

• 24 continuous months, or
• The full period (at least 181 days) for which you were called or ordered to active duty, or
• At least 181 days if you were discharged for a hardship, a reduction in force, or for convenience of the government, or
• Less than 181 days if you were discharged for a service-connected disability

Active Duty

For active duty troops, VA loan eligibility proves far easier to determine. If you’re currently on active duty, you qualify for the home loan if you’ve served at least 90 days of continuous service. Most troops meet this threshold within the first few months of their first enlistment.

VA Loan Military Service Requirements for National Guard and Reserve

Both National Guard and Reserve members qualify for the VA loan if they meet one of the below military service requirements:

• Completed at least six years of honorable service, or
• Mobilized for active duty for a period of at least 90 days, or
• Received a discharge due to a service-connected disability

What if I Don’t Meet the Minimum Military Service Requirements for a VA Loan?

Generally speaking, to qualify for the VA home loan, you must meet one of the above requirements. However, exceptions to these minimum service requirements exist for certain service members. If you were discharged for one of the below reasons, you may still be able to receive a VA loan COE:

• Hardship, or
• The convenience of the government (you must have served at least 20 months of a 2-year enlistment), or
• Early out (you must have served 21 months of a 2-year enlistment), or
• Reduction in force, or
• Certain medical conditions, or
• A service-connected disability (a disability related to your military service)

If you believe you fall into one of the above categories, you can apply directly with the VA for a COE.

VA Loan and Discharge Status

Alternatively, some veterans may not qualify for the VA loan due to their discharge status, regardless of the fact that they otherwise met the minimum service requirements. More precisely, if you received an other-than-honorable, bad conduct, or dishonorable discharge, you may not be eligible for VA loans.

Fortunately, the VA offers these veterans two other options to qualify for a COE:

Option 1: Apply for a Discharge Upgrade

With this automated system, veterans can use the VA website to: “Answer a series of questions to get customized step-by-step instructions on how to apply for a discharge upgrade or correction. If your application goes through and your discharge is upgraded, you’ll be eligible for the VA benefits you earned during your period of service.”

Option 2: Apply for the VA Character of Discharge Review Process

Even when veterans don’t qualify for a discharge upgrade, they may be able to access VA benefits. According to VA guidance: “Even with a less than honorable discharge, you may be able to access some VA benefits through the Character of Discharge review process. When you apply for VA benefits, we’ll review your record to determine if your service was “honorable for VA purposes.” This review can take up to a year. Please provide us with documents supporting your case, similar to the evidence you’d send with an application to upgrade your discharge.”

Furthermore, the VA recommends that veterans may want: “to consider finding someone to advocate on your behalf, depending on the complexity of your case. A lawyer or Veterans Service Organization (VSO) can collect and submit supporting documents for you.”

Final Thoughts

The VA loan serves as one of the most significant financial benefits to service. But, to qualify, troops must meet certain minimum service requirements. If you don’t fall into one of the above categories but believe your military service justifies VA loan eligibility, contact your local VA Regional Loan Center for more information.

Maurice “Chipp” Naylon spent nine years as an infantry officer in the Marine Corps. He is currently a licensed CPA specializing in real estate development and accounting.