Sara Routhier, Managing Editor of Features and Outreach, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming worl...

Full Bio →

Written by

Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

Full Bio →

Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Oct 17, 2012

Advertiser Disclosure

Advertiser Disclosure: We strive to help you make confident loan decisions. Comparison shopping should be easy. We are not affiliated with any one loan provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about loans. Our goal is to be an objective, third-party resource for everything loan related. We update our site regularly, and all content is reviewed by experts.

Veterans with a less-than-honorable discharge may or may not be able to obtain a VA loan.

VA loans are home financing lent through private lenders. However, VA loans are guaranteed by the federal government. This guarantee allows lenders to give very generous rates on the VA loans they lend to veterans.

Military service members often exit the armed forces with either an honorable discharge or a less-than-honorable discharge.

Veterans that have an honorable discharge will have no problem applying for loan. While there are a variety of approval requirements, they will still be eligible to apply even after rejection. Unfortunately, this isn’t the case with veterans that have less-than-honorable discharges.

Lenders may or may not grant financing to veterans with less-than honorable discharges. This category is essentially a middle ground between honorable or dishonorable discharges. Unfortunately, the particular circumstances of a veteran’s less-than-honorable discharge will have to be evaluated prior to financing approval or rejection. Additional paperwork is almost always required. Speaking to the local VA office may be wisest for interested applicants with less-than-honorable discharges.

Veterans with dishonorable discharges will probably be unsurprised to find that they are unable to receive VA loans. A dishonorable discharge results in many penalties, and the lost access to a federally guaranteed home loan is just one of these.

In the event that a veteran is able to upgrade or change their discharge status to an honorable discharge status, then they would be eligible for a VA loan. Therefore, it is of prime importance that any veterans who have less-than-honorable discharges and even dishonorable discharges do everything they can to improve their situation for the better. Seeking to appear before a discharge review board is one of the best ways veterans can try and upgrade their status. Sometimes contacting a lawyer may be required.