Who does not pay the VA funding fee, and how to confirm it
Disability compensation
Short answer
Any veteran who receives VA compensation for a service-connected disability is exempt from the funding fee, regardless of the rating level. Veterans who would receive compensation but get retirement or active duty pay instead are also exempt. The rating has to be in place, or effective, before closing.
Last reviewed against the primary sources listed below.
Before you close
- Confirm your rating shows on your VA records.
- Ask the lender to check exemption status on your COE.
- Raise any mismatch before you sign.
Exemption questions
Does a low disability rating count?
Yes. VA's exemption is based on receiving or being entitled to compensation, not on the rating level.