Unpacking the unique financial struggles divorcing veterans face and the strategies that protect their benefits and housing stability.

Divorce is never easy, but for veterans and military personnel, the financial impact can be uniquely complex. Between the division of military pensions, the complications of VA loan entitlements, and the challenges of layered income structures, these cases often create financial hurdles that many attorneys and mortgage professionals simply aren’t equipped to address.

That gap creates risk, not just for the divorcing couple, but also for the professionals tasked with guiding them. Missed details can lead to settlement agreements that cannot be financed, veterans who lose valuable benefits, or spouses who find themselves locked out of stable housing.

This is where divorce mortgage planning becomes indispensable. By understanding the unique struggles of divorcing veterans, Certified Divorce Lending Professionals (CDLP®s) can bridge the gap between family law, housing, and mortgage strategy.

Division of Military Pensions & Retirement Benefits

For most service members, the military pension is one of the largest marital assets. Under the Uniformed Services Former Spouses’ Protection Act (USFSPA), state courts may treat the pension as divisible marital property. But here’s where it gets complicated:

  • The 10/10 Rule: For the Defense Finance and Accounting Service (DFAS) to pay a former spouse’s share directly, the marriage must have lasted at least 10 years, overlapping with 10 years of service. Even if a spouse is awarded part of the pension, without the 10/10 overlap, DFAS won’t handle direct payments. This creates enforcement challenges.
  • VA Disability Pay Offsets: Veterans who receive disability compensation often have a reduced “disposable retired pay” amount. Because VA disability benefits are generally non-divisible, the offset can reduce the share a former spouse was expected to receive. This is one of the most litigated issues in military divorce cases.
  • Marital vs. Non-Marital Share: Determining the marital portion requires careful calculation, often blending state-specific laws with federal rules.

For both the veteran and the former spouse, the division of retirement benefits can create long-term financial uncertainty. CDLPs can play a pivotal role by helping attorneys and clients understand how these divisions affect borrowing power, post-divorce housing stability, and the feasibility of future mortgage financing.

Housing & VA Loan Entitlement Challenges

The VA loan is one of the most valuable benefits of military service, but divorce often complicates its use.

  • Entitlement Lock-Up: If the marital home is financed with a VA loan and awarded to the non-military spouse, the veteran’s VA entitlement remains tied up until the loan is refinanced or paid off. This prevents the veteran from purchasing again using VA benefits.
  • Spousal Qualification Issues: While a former spouse may be allowed to keep the home, they may not qualify to assume or refinance the VA loan without the veteran’s continued involvement. This creates tension and, in many cases, leads to a stalemate.
  • Restoration of Benefits: Veterans cannot always restore their entitlement immediately, leaving them in limbo for future homeownership opportunities.

The result? Housing instability for both parties and lost opportunities for the veteran to use one of their most important benefits. CDLPs can provide critical insight into refinance feasibility, assumption rules, and alternative financing options to ensure settlement terms are realistic.

Support & Income Recognition

Military income is rarely as straightforward as a civilian W-2 paycheck. It often includes:

  • Base Pay
  • Basic Allowance for Housing (BAH)
  • Basic Allowance for Subsistence (BAS)
  • Special & Hazard Duty Pay
  • Deployment Pay

This complexity creates challenges in two key areas:

  • Support Calculations: Different states treat allowances differently when determining child or spousal support. For example, BAH may be included in support calculations in one jurisdiction but excluded in another.
  • Mortgage Underwriting: Lenders vary in how they treat these income streams. Some may count BAH and BAS, while others require proof of continuance. Deployment income may be viewed as temporary and excluded.

Add in the potential for garnishments due to support obligations, and the financial strain on the service member can quickly escalate. For divorcing families, this means uncertainty about whether support payments are sustainable and whether either spouse can qualify for future financing.

CDLPs can bridge the gap by clarifying how military income is treated under underwriting guidelines versus legal calculations, ensuring settlement terms align with real-world financing.

Why This Matters for Attorneys and Clients

Military divorces are different, and failing to recognize these differences can have lasting financial consequences. An attorney may draft a settlement agreement that awards a home or divides a pension, only to discover later that the agreement is unfinanceable or unenforceable.

This is where collaboration with a CDLP® becomes invaluable. By anticipating how pension division, VA loans, and income structures impact mortgage strategy, CDLPs help attorneys draft settlements that actually work in practice. For clients, this means greater housing stability, access to their rightful benefits, and fewer financial surprises after divorce.

For veterans and their families, divorce requires more than a standard financial plan; it requires a strategy that accounts for pensions, housing, and income in the unique context of military service. These three struggles: retirement benefits, housing entitlements, and income complexities, can derail even the most carefully crafted settlement if not handled correctly.

CDLPs are uniquely positioned to bridge these gaps, providing clarity where legal and lending systems collide. By doing so, they not only serve an underserved population but also establish themselves as indispensable experts in one of the most overlooked markets in family law.

Together, we’re redefining how divorce settlements are structured, with clarity, strategy, and impact.

Take the Next Step

If you’re negotiating a divorce settlement that involves the marital home, don’t leave your financial future to chance. Partnering with a Certified Divorce Lending Professional (CDLP®) in your local area can ensure that your appraisal contingency and your entire mortgage strategy are structured to protect both your finances and your future.

Find a CDLP® near you today to align your settlement with real-world lending guidelines and move forward with clarity and confidence.

Disclaimer: This article is intended for educational purposes only and should not be considered legal, tax, or financial advice. Each divorce situation is unique, and you should consult with qualified professionals, including an attorney, financial advisor, and a Certified Divorce Lending Professional (CDLP®), before making any decisions regarding your divorce settlement, mortgage, or real property division.