Who does not pay the funding fee

The VA funding fee is a one-time charge on most VA loans. Some veterans do not have to pay it. If you are one of them, the exemption can lower what you bring to closing, so make sure your lender knows before the loan is set up.

According to the VA, you are exempt from the funding fee if any of these apply:

• You receive VA compensation for a service-connected disability, at any rating.
• You are eligible to receive that compensation but are receiving military retirement or active-duty pay instead.
• You are an active-duty service member with a pre-discharge disability rating that shows you would qualify for compensation.
• You are a surviving spouse of a veteran who died in service or from a service-connected disability, and you receive Dependency and Indemnity Compensation.
• You are a Purple Heart recipient on active duty at the time of the loan.

Check the VA current rules for the full list. Details change, and the VA page is the final word.

How the exemption gets documented

Your Certificate of Eligibility, or your VA award letter, shows whether you are exempt. Your lender can pull the COE for you. If you have a pending disability claim, tell your lender before closing, because that can affect when and how the fee is handled. See how to get your COE.

What to ask your lender

• Is my funding fee exempt, and where does it show on my Loan Estimate?
• What happens if my rating is approved after I close?
• Do you check the exemption yourself, or do I need to bring a letter?

A note on refunds

If a veteran paid the fee and later gets a disability rating that covers the loan date, a refund may be possible through the VA. Refunds are not guaranteed, so tell your lender about any pending claim before closing and ask the VA about your situation.

Disabled veterans can also read about home loans for 100% disabled veterans and the VA funding fee overview.

Buying in Kansas or Missouri

I am a mortgage broker licensed in Kansas and Missouri, and I can walk through your situation and what documents to gather.

Call or text Steve at 913.530.8133.

Steven Clune, NMLS 2798604 | Nexa Lending, NMLS 1660690 | Licensed in Kansas and Missouri | Equal Housing Opportunity

Veteran resources

See our Kansas City veteran home buying resources for local VA offices and property tax relief.