Housing

VA Home Loan Funding Fee Exemption

No VA funding fee, which is otherwise 1.25% to 3.3% of a purchase loan, for a veteran receiving or entitled to VA compensation, a surviving spouse on DIC, a Purple Heart recipient on active duty, and a service member with a pre-discharge rating.

Also called: funding fee waiver, funding fee exemption, funding fee refund, VA loan fee.

For: Veteran or service member, survivor.

Where it applies

Applies in states and territories.

Federal

The VA funding fee is a one-time charge on most VA-backed and VA direct loans. For a purchase with less than 5% down it is 2.15% of the loan on first use and 3.3% after; with 5% down it is 1.5%, and with 10% down 1.25%. Those rates have applied since April 7, 2023. A borrower pays no fee when they receive VA compensation for a service-connected disability, are entitled to compensation but receive retired or active-duty pay instead, are a surviving spouse receiving DIC, are a service member with a proposed or memorandum rating before closing that shows entitlement to compensation from a pre-discharge claim, or are an active-duty member who shows evidence of a Purple Heart on or before closing. A veteran later awarded compensation with an effective date before the loan closed can ask VA for a refund of the fee. A rating issued after closing on a pre-discharge claim does not earn a refund.

Thresholds

Thresholds for VA Home Loan Funding Fee Exemption
Gate	Rule
Receiving or entitled to compensation	A compensable service-connected rating is the usual path. DIC surviving spouses and active-duty Purple Heart recipients are exempt without one.

Documents the source lists

What the official source lists for an application, and where to get each document. It is a reference read from the source, not a full list of what the office may ask for; check with the office or an accredited representative before you apply. Needed means the source asks for it; Helps means the source calls it optional or says it speeds things up.

Needed Evidence that you received a Purple Heart
If you are on active duty and claim the exemption for a Purple Heart; give it on or before the closing date.
Where to get it Your award orders or your service records.
Listed by VA funding fee and loan closing costs read 2026-10-10

Figures

Each figure is dated with the day it was read. A local figure moves whenever the statute or the local ordinance does, so confirm it with the office that grants it before you rely on it. Statute verified gives the day the weekly section check last found the statute standing on the legislature’s own code site; a figure without it rests on a statute the check does not read yet.

Dated figures for VA Home Loan Funding Fee Exemption
Figure	Amount	Read from
Purchase funding fee, under 5% down, first use and after	2.15% and 3.3%38 U.S.C. 3729(b)(2)(A)	VA funding fee and loan closing costsRead 2026-10-08

Sources

VA funding fee and loan closing costsOfficial
38 U.S.C. 3729, Loan feeOfficial

Updated

Last updated 2026-10-08.

What changed then:

First published.

Request an update

Out of date, a broken link, or something else wrong? Say what you found, and an editor checks it against the official source.

Disclaimer

VetTOC is not affiliated with the U.S. Department of Veterans Affairs or the Department of Defense. Information is for reference only and is not an eligibility determination. Verify with VA, the relevant state or territory, or an accredited VSO.