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VA Loan Eligibility Exceptions

The VA mortgage benefit is one of the most important military benefits you can qualify for outside of the GI Bill. But did you know that some who did not serve in the Army, Navy, Air Force, Space Force, Marine Corps, or Coast Guard could still qualify?

VA home loans typically require a minimum amount of time in uniform to qualify for the VA loan program. VA loan rules say that in typical cases, those serving today must meet a minimum 90-day active duty requirement and for those who joined in earlier service eras the requirement varies. But for some these rules don’t apply at all.

Some may be able to apply for a VA loan Certificate of Eligibility if they didn’t serve the full required time, and some may be able to get eligibility without having enlisted or getting a commission at all. This may be due to accepting a seat in a military academy, becoming a uniformed officer of the Public Health Service, or other options as we’ll explain below.

VA Loan Eligibility Exceptions For Military Members

You may still qualify for the VA loan program if you didn’t meet the time-in-service requirements if one of the following applies to you:

  • You received a hardship discharge
  • You were discharged at the convenience of the government after serving at least 20 months of a 2-year enlistment
  • You accepted an early out after serving 21 months of a 2-year enlistment
  • You were part of a Reduction in Force (RIF)
  • You have “certain medical conditions”
  • You have a service-connected disability

Some applicants are ineligible because of the nature of their military discharges. If you have an Other Than Honorable, Bad Conduct, or Dishonorable Discharge, you may have recourse by applying for a military discharge upgrade.

Contact the VA directly to learn how to initiate this process, but be advised that you are not eligible to apply for a VA loan until after the upgrade process is complete and the change is reflected on your official records.

Qualifying For A VA Loan In Other Ways

The VA advises those who served as a member in “certain organizations” that VA loan eligibility may be possible. Which organizations? They include but are not limited to:

  • Public Health Service officers
  • Cadets at the United States Military, Air Force, or Coast Guard Academy
  • Midshipmen at the United States Naval Academy
  • Officers of the National Oceanic & Atmospheric Administration (NOAA)
  • Qualifying merchant seaman during World War II

Note that in most cases, those eligible for a VA loan are either military or military adjacent. Midshipmen and Cadets are soon-to-be uniformed service members, and NOAA and the Public Health Service are among eight federal uniformed service programs.

The VA official site provides little detail about applying for a VA Certificate of Eligibility in such cases. It’s best to contact the VA directly at their toll-free number 1-800-827-1000 to discuss your needs and learn how to apply. You can also contact any VA Regional office near you.

Using A VA Loan

The procedure for using VA loan benefits once they are officially yours (by obtaining a VA Certificate of Eligibility or COE) is exactly the same in most respects. You will be required to credit qualify for the loan, you will be required to pay a VA loan funding fee unless you are exempt by virtue of receiving or being eligible to receive VA compensation for service-connected medical issues.

VA loans typically feature no down payment, no VA-required mortgage insurance, and there is no penalty for early payoff of the loan. You will be expected to pay your mortgage on schedule, and the participating lender must work with you to save your home if you get into trouble on your VA mortgage.

Like other VA loan applicants, those who apply for a VA COE are not permitted to transfer it to a dependent child or other relatives. The VA loan benefit is non-transferable. A surviving spouse of a military member who died as the result of active duty may qualify for a VA mortgage loan, but that is the only exception offered.

VA loans have a zero-down option which is applicable to all regardless of how you may qualify for the mortgage. But making a down payment can help offset the amount of your VA loan funding fee depending on how much you choose to put down. For some, this may not be a major concern, but if your goal is to save more money over the lifetime of the loan, a VA loan down payment may be a wise choice.