Do disabled veterans pay the VA funding fee?
Veterans receiving VA disability compensation are generally exempt. Veterans entitled to that compensation but receiving retirement or active-duty pay instead may also be exempt; qualifying pre-discharge ratings can apply. Confirm VA's funding-fee determination and COE before relying on the exemption.
What this actually means.
Actual receipt of VA disability compensation is one common exemption, but it is not the only path. VA also lists veterans who are entitled to compensation but receive retirement or active-duty pay instead, certain borrowers with qualifying pre-discharge ratings, surviving spouses receiving DIC, and qualifying active-duty Purple Heart recipients. A later disability award may support a refund when its effective date precedes closing. Use VA's funding-fee determination and the COE rather than assuming from the disability percentage alone.
Where this can move.
First/subsequent use, down payment percentage, loan type (purchase, IRRRL, cash-out), and exemption status (disability, surviving spouse) drive the fee.
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Educational only. VA guidelines, lender overlays, rates, fees, and underwriting requirements can change. Final eligibility depends on full underwriting review. Mortgage Expert, Inc. is not affiliated with the VA, HUD, or any government agency.