VA Funding Fee
Who is exempt from the VA funding fee?
Five groups do not pay it.The Department of Veterans Affairs (VA) charges a one-time funding fee on a VA loan. If you fit one of five groups, you do not pay it. If you paid and VA later backdates your disability compensation to before closing, you may get it back.
This page shows the five groups, how to check yours before you close, and when VA gives a refund.
Start Here
What the fee is, and what exempt means
The VA funding fee is a one-time payment on a VA loan. Exempt means you do not pay it at all.
VA says the fee helps lower the cost of the loan program for taxpayers, because a VA loan needs no down payment and no monthly mortgage insurance.
You pay it when the loan closes, or you add it to the loan and pay it over time. The amount is a percentage of the loan. It depends on the type of loan, and for some loans on your down payment and whether you have used a VA loan before. VA's funding fee page shows the rates.
Sources: VA funding fee and loan closing costs, VA. Retrieved 13 October 2026.
The Five Groups
Who does not pay it
VA says you will not pay the funding fee if any one of these is true for you.
You receive VA compensation for a service-connected disability
VA's rule is about receiving compensation, not a rating percentage. A VA pension is not the same thing: VA's Form 26-8937 lists a non-service-connected pension as not exempt.
You are eligible for that compensation, but receive retirement or active-duty pay instead
If you get military retirement pay instead of VA compensation, VA's lender handbook says your lender may use your original VA disability rating notice and proof of your retirement pay to confirm it.
You receive Dependency and Indemnity Compensation (DIC) as the surviving spouse of a veteran
DIC is a tax-free VA payment to survivors of a service member who died in the line of duty, or of a veteran who died from a service-related injury or illness. If you are a surviving spouse who does not receive DIC, ask VA or your lender how the fee applies to you.
You are a service member, rated eligible for compensation before your loan closes
VA calls this a proposed or memorandum rating: a rating VA gives before you leave the military. It has to come from a pre-discharge claim, a disability claim you file before you leave, and it has to say you are eligible for compensation. The rating has to come before closing.
You are on active duty, and on or before closing you show proof of a Purple Heart
You need both: active duty, and proof given by the closing date.
Being a veteran, or being on active duty, does not exempt you by itself.
Sources: VA funding fee and loan closing costs (the five groups). VA Circular 26-23-19, section 2. 38 U.S.C. 3729(c). VA Form 26-8937 (pension). VA Lenders Handbook, Chapter 8, Topic 8 (subsection c, retirement pay). Dependency and Indemnity Compensation and Pre-discharge claim, VA. Retrieved 13 October 2026.
Check Before You Close
How to check your status
Your Certificate of Eligibility, the VA document that shows your home loan benefit, shows your funding fee status. Your lender checks it. On an interest rate reduction refinance loan (IRRRL), no certificate is needed: your lender sees your status in VA's system.
If it says Non-Exempt and you have a disability claim waiting at VA, tell your lender. VA tells lenders to ask about a waiting claim and, if you are not on active duty, to request an updated certificate before closing. VA says that can take up to 5 business days. It can take longer if VA needs more information.
If you are on active duty with a pre-discharge claim waiting and the certificate says Non-Exempt, VA tells your lender to send VA Form 26-8937, Verification of VA Benefits. If VA has not rated the claim yet, the certificate can show a status of Non-Exempt and In Development. That means you are not exempt yet. For questions about the claim itself, VA says to ask your Physical Evaluation Board Liaison Officer (PEBLO) or call VA at 800-827-1000.
If your claim is still waiting when you close, VA's lender handbook says the fee is paid as if you were not exempt. If you close on active duty with a pre-discharge claim still waiting and no proposed or memorandum rating, VA says you cannot get a refund. Otherwise, see refunds below.
Sources: VA Circular 26-23-19, sections 3.b to 3.d. VA Lenders Handbook, Chapter 8, Topic 8 (subsection e). VA Form 26-8937. All VA, retrieved 13 October 2026.
Refunds
When VA gives the fee back
VA says you may be eligible for a refund if VA later awards you compensation for a service-connected disability.
The start date VA sets for that compensation has to be before the date your loan closed.
What does not get a refund: a proposed or memorandum rating that comes after your closing date. VA says you still pay the fee and cannot get a refund based on that rating.
To ask for one, call your VA regional loan center at 877-827-3702 (TTY: 711).
Do not close counting on a refund. VA tells lenders not to advise a veteran who believes they are exempt to close and ask for a refund later, because each refund decision is specific to that veteran and cannot be guaranteed. Get your status right before you close.
Sources: VA funding fee and loan closing costs (refunds, phone). VA Circular 26-23-19, section 3.a. Both VA, retrieved 13 October 2026.
Before You Close
What to ask your lender
Ask these early, before the closing date is set.
- What funding fee status does my Certificate of Eligibility show?
- I have a VA disability claim waiting. Can you ask VA for an updated certificate before closing?
- I am on active duty with a pre-discharge claim. Will you send VA Form 26-8937?
- If I am not exempt, how much is my fee, and will I pay it at closing or add it to the loan?
- Can the seller pay part of it?
If the seller pays it
VA allows a seller to offer to pay your funding fee. VA counts that as a seller concession, something of value the seller adds at no cost to you, and VA limits concessions to 4% of the home's reasonable value, the value shown on the VA Notice of Value your lender gives you.
This page is not legal or financial advice. VA decides who is exempt and who gets a refund, and your lender collects the fee. Ask VA or your lender about your own case.
Sources: VA funding fee and loan closing costs (paying the fee, seller concessions). VA Circular 26-23-19, sections 3.c and 3.d. Both VA, retrieved 13 October 2026.
A page can explain the rules.An agent who knows them can help you ask the right questions before you close.
Mission Ready Operators are trained and tested on the VA loan, including the funding fee. VA still decides who is exempt, and your lender collects the fee.
Last reviewed October 2026 · Maintained by My Military HQ
Common Questions
Questions veterans ask about the VA funding fee
Who is exempt from the VA funding fee?
VA lists five groups who do not pay the VA funding fee. You are exempt if you receive VA compensation for a service-connected disability, or are eligible for it but receive retirement or active-duty pay instead. Or if you receive Dependency and Indemnity Compensation (DIC) as a veteran's surviving spouse. Or if you are a service member who, before your loan closes, gets a proposed or memorandum rating from a pre-discharge claim that says you are eligible for compensation. Or if you are on active duty and show proof of a Purple Heart on or before closing. Your lender checks your status with VA.
Can I get my VA funding fee refunded?
Possibly. VA says you may be eligible for a refund of the VA funding fee if VA later awards you compensation for a service-connected disability, and the start date VA sets for it is before your loan closed. A proposed or memorandum rating that comes after closing does not count. To ask, call your VA regional loan center at 877-827-3702 (TTY: 711).
Is the VA funding fee waived with a 10% disability rating?
Not by the percentage itself. VA's funding fee rule is about receiving compensation. You do not pay the VA funding fee if you receive VA compensation for a service-connected disability, or are eligible for it but receive retirement or active-duty pay instead. A VA pension is not the same thing: VA's Form 26-8937 lists a non-service-connected pension as not exempt. Ask your lender what your Certificate of Eligibility shows.
Do surviving spouses pay the VA funding fee?
VA says you do not pay the VA funding fee if you receive Dependency and Indemnity Compensation (DIC) as the surviving spouse of a veteran. If you are a surviving spouse who does not receive DIC, ask VA or your lender how the fee applies to you.
Is the VA funding fee waived for active duty?
Being on active duty does not exempt you from the VA funding fee by itself. On active duty, VA's list covers you if you are eligible for VA compensation for a service-connected disability but receive active-duty pay instead, if you have a proposed or memorandum rating from a pre-discharge claim, before closing, that says you are eligible for compensation, or if you show proof of a Purple Heart on or before closing. Your lender checks your status with VA.
Who pays the VA funding fee?
VA says the veteran, service member or survivor using the loan pays the VA funding fee, unless they are exempt. You can pay it at closing or add it to the loan. A seller can also offer to pay it, and VA counts that toward its limit on seller concessions. Your lender works out the amount.
Sources
Where every fact came from
Everything on this page comes from VA or from federal law. Where VA does not say something, we left it out.
- What the fee is, the five groups, refunds, how to pay, the rates, and seller concessions. VA funding fee and loan closing costs, VA. Retrieved 13 October 2026.
- The five groups, checking your status, the IRRRL, active-duty claims, and refunds that cannot be guaranteed. VA Circular 26-23-19, VA Funding Fee Exemption and Refund Procedures for Lenders, VA, valid until rescinded. Retrieved 13 October 2026.
- The law on who does not pay. 38 U.S.C. 3729(c), United States Code. Retrieved 13 October 2026.
- Who works out the fee, confirming your status if you get retirement pay instead of VA compensation, and a claim still waiting at closing. VA Lenders Handbook (VA Pamphlet 26-7), Chapter 8, Topic 8, VA. Retrieved 13 October 2026.
- The form your lender sends, and a VA pension. VA Form 26-8937, Verification of VA Benefits, VA. Retrieved 13 October 2026.
- What DIC is. VA Dependency and Indemnity Compensation, VA. Retrieved 13 October 2026.
- What a pre-discharge claim is. Pre-discharge claim, VA. Retrieved 13 October 2026.
- How to get your Certificate of Eligibility. How to request a VA home loan Certificate of Eligibility, VA. Retrieved 13 October 2026.
- Questions about your own case. VA Home Loans contact page, VA.
What we left out on purpose. We give no funding fee rates, because they can change. Use VA's chart. We do not say how a refund is paid back, because two VA sources describe it differently, so ask your loan center. We do not say how long a refund takes, because VA does not say. And we do not cover how VA rates a disability claim.
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