Who does not pay the VA funding fee, and how to confirm it
Who is exempt
Short answer
VA lists the exempt groups on its funding fee page. You do not pay the fee if you receive VA compensation for a service-connected disability, would receive it if you were not getting retirement or active duty pay, are rated eligible for compensation in a pre-discharge review, are an active duty Purple Heart recipient, or are a surviving spouse receiving DIC. The exemption applies to refinances as well as purchases.
Last reviewed against the primary sources listed below.
The groups at a glance
| Group | Key condition |
|---|---|
| Veterans with compensation | Receiving, or entitled to receive, VA disability compensation |
| Pre-discharge rating | Rated eligible before discharge, with an effective date before closing |
| Purple Heart | On active duty at closing, with proof of the award |
| Surviving spouses | Receiving Dependency and Indemnity Compensation |
Exemption questions
Does the exemption apply to an IRRRL?
Yes. An exempt borrower does not pay the funding fee on an IRRRL or a cash-out refinance either.