veteran home loan funding fee exemption

VA Loans

Veteran Home Loan Funding Fee Exemptions: Who Qualifies for Waivers?

Are you a veteran or military member who is interested in buying a home with a VA loan? If so, you may have questions about VA loan funding fee exemptions. In this article, we’ll delve into the details of veteran home loan funding fees and when exemptions may apply. 


What Is the VA Home Loan Funding Fee?

The VA funding fee is a mandatory charge that borrowers must pay when taking out a VA loan. Its purpose is to help offset taxpayer costs associated with the VA loan program. Essentially, it enables the program to remain self-sustaining so it can continue helping veterans achieve their homeownership dreams. 


How Much Does It Cost?

The fee varies depending on factors such as your down payment and whether it’s your first VA loan purchase or subsequent loan. For a first-time VA purchase loan…

  • with a down payment of less than 5%, the funding fee is 2.15% of the purchase price.
  • with a down payment of 5% to 9.9%, the fee is 1.5% of the purchase price.
  • with a down payment of 10% or more, the funding fee is reduced to 1.25% of the purchase price.

For subsequent VA loans, the funding fee is slightly higher:

  • 3.3% with a down payment of less than 5%
  • 1.5% with a down payment of 5% to 9.9%
  • 1.25% with a down payment of 10% or more


General Eligibility for Funding Fee Exemptions

While the funding fee is a necessary aspect of VA loans, certain individuals may qualify for exemptions. If any of the following descriptions apply to you, you may not have to pay the VA funding fee:

  • Veterans with Service-Connected Disabilities: If you are receiving or eligible to receive VA compensation for a service-connected disability, the funding fee exemption applies.
  • Surviving Spouses: The exemption extends to surviving spouses who are receiving Dependency and Indemnity Compensation (DIC) following the passing of a veteran spouse.
  • Pre-Discharge Claim: Service members who receive a proposed or memorandum rating before the loan closing date, indicating eligibility for compensation due to a pre-discharge claim, are exempt.
  • Purple Heart Recipients: Active-duty service members providing evidence of receiving the Purple Heart before or on the loan closing date qualify for exemption.


Advantages of Funding Fee Exemptions

Securing a funding fee exemption can have significant financial benefits. Not having to pay this fee reduces upfront costs, making homeownership more affordable.


Get More Info About Veteran Home Loans

At Mortgage Solutions Financial, we are committed to assisting veterans and military members in realizing their dreams of owning a home. If you need guidance on funding fee exemptions or veteran home loans in general, please don’t hesitate to contact us. Together, let’s make your homeownership journey a reality!