Loan costs

Who may be exempt from the VA funding fee?

VA lists five funding-fee exemption categories, including qualifying disability-compensation recipients, DIC recipients, and certain active-duty service members. Review the categories below, then ask your lender to confirm your official exemption status before closing. Other closing costs can still apply.

What this page does not decide

This page cannot declare an exemption, verify a disability or survivor benefit, quote a final fee, promise a refund, or determine other closing costs.

Who does VA list as exempt from the funding fee?

  • Veterans receiving VA disability compensation for a service-connected condition.
  • People eligible for that compensation who receive retirement or active-duty pay instead.
  • Surviving spouses receiving Dependency and Indemnity Compensation (DIC).
  • Service members with a qualifying proposed or memorandum rating for a pre-discharge claim received before closing.
  • Active-duty Purple Heart recipients who provide evidence of the award by closing.

Verify the exact exemption categories and refund rules on VA.gov. Checked September 10, 2026.

Ask the lender to verify your official exemption status before closing. An exemption removes the funding fee, not every closing expense.

Separate the official record from the surrounding facts.

Verified benefit status

A visitor’s description may suggest a question to ask, but official VA information must establish the exemption status.

Loan type

Purchase, construction, refinance, IRRRL, and other transactions can follow different funding-fee schedules.

Prior use and down payment

For transaction types where those factors apply, the current schedule can change based on prior use or down payment.

Timing of an award

A benefit decision effective before closing but documented later can raise a possible refund question that requires official review.

Other closing costs

The funding fee is not the same as lender charges, discount points, appraisal fees, taxes, insurance, title costs, or other transaction expenses.

Find the branch that resembles your question.

Your COE shows an exemption

Ask the lender to confirm how the verified status is reflected in the transaction and disclosures.

A disability claim is pending

Do not assume the outcome or timing. Ask how closing and a later effective benefit decision could affect the process.

You are a Purple Heart recipient on active duty

Check the exact current VA category and ensure official verification is available to the lender.

A fee was paid and status later changed

Ask VA or the lender whether the official effective date and case facts support a refund review.

Use this decision path.

Organize only non-sensitive facts. Do not send private service, identity, credit, tax, income, or account records through this site.

  1. Identify the loan type and whether an official COE or lender record currently shows an exemption.
  2. Check the current exemption categories and funding-fee schedule directly on VA.gov.
  3. Ask the lender what official verification is required before closing.
  4. For a possible refund, use the official effective dates and transaction record rather than relying on a general example.

Verify the current VA guidance.

Program guidance can change. Review the official sources supporting this page.

VA.gov: Funding fee and loan closing costs

Supports: Current funding-fee purpose, schedules, exemption categories, refunds, and other closing-cost distinctions.

VA.gov page last updated January 15, 2026; exemption categories checked September 10, 2026