Who is Exempt from Paying the VA Loan Funding Fee?


VA Loans-Who is Exempt from Paying VA Funding FeeVA loans are a great benefit for active duty, retired, reservists and survivng spouses to assist in buying a primary residence.  I've used VA loan benefits twice to buy homes and it is one of the only remaining 100% loan programs available in today's mortgage market.

VA funding fees for non-exempt categories vary slightly by the amount of your downpayment and if you are on Reserve or National Guard StatusFor example the VA Funding fee is 2.15% for first time VA eligible purchasers on 0% downpayment loans and 3.3% for subsequent purchases. 

If you are active duty military relocating to the Northern Virginia area in the near future give me a call at 703-346-2213 to discuss whether buying a home using your VA benefits make sense for you.  I'll connect you to knowledgable lenders who understand the VA loan programs.


The Department of Veterans Affairs offers VA home loans to qualified veterans and their families—that’s common knowledge. What’s not so well known is how the government can afford to pay for this program. The VA loan program is paid for in part by the VA funding fee borrowers pay in addition to closing costs and other expenses related to buying a home.

Like many other aspects of buying a home, there’s no one-size-fits-all VA funding fee amount. The amount of the fee varies depending on a number of factors including how much (if any) down payment is made on the VA mortgage, and the military status of the applicant.

The VA doesn’t charge funding fees in all cases
. There is a list of VA-approved circumstances that make the VA loan applicant exempt from having to pay this fee, which can be as much as 2.15% of the total loan amount in some cases. Who is exempt from paying the VA loans funding fee? According to the VA:

  • Veterans who receive VA compensation for service‐related disabilities are exempt from the VA funding fee
  • Veterans who are rated by VA as eligible to receive compensation as a result of pre-discharge disability examination and rating.Veterans who would receive compensation for service‐related disabilities if they did not receive retirement pay are also exempt
  • Surviving spouses of military members who died on duty or who died or from service‐related disabilities as determined by the Department of Veterans Affairs are exempt

The existence of these situations that exempt the borrower from paying the VA funding fee aren’t’ enough. The VA requires the following documentation and paperwork:

  • A VA Form 26-8937, Verification of VA Benefits, indicating the borrower’s exempt status
  • For veterans who choose retirement pay instead of VA compensation, a copy of the original VA notification of disability rating


  • Documentation of the veteran’s service retirement income

For surviving spouses, the VA requires a Certificate of Eligibility that shows the borrower is entitled as an unmarried surviving spouse.

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If you are interested in learning more about the Northern Virginia Real Estate market including Alexandria, Arlington, Fairfax and Prince William Counties give Cindy Jones and Integrity Real Estate Group a call at 703-346-2213.

Military Relocation Specialist serving military families relocating to and from the Pentagon, Fort Belvoir, Quantico MCB and all of the Military District of Washington installations. 

Military Relocation Professional

Check out www.varealestatetalk.com and www.cjrealtygroup.com for more information.

Integrity Real Estate Group
Real People*Real Life*Real Estate

Licensed in the Commonwealth of Virginia



Comment balloon 1 commentCindy Jones • September 24 2010 07:01AM


Terrific information about VA loans.  Glad you reblogged this for Virginia military folks.

Posted by Pat Fenn (Marketing Specialist for CJ Realty Group/Cindy Jones Broker ) about 9 years ago

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