Veterans & Active-Duty, Listen Up: Your VA Funding Fee—Here’s What You Can Do
Hey there, fellow Veterans and active-duty service members! Did you know the VA Funding Fee—a one-time cost tied to VA home loans—comes with some powerful perks? Here’s the scoop:
1. You can roll the Funding Fee into your loan
No need to pay it upfront at closing. You can finance the VA funding fee as part of your loan, spreading it across your monthly payments instead. It’s the only closing cost that’s automatically eligible for this treatment. Benefits+9Veterans Affairs+9VA Loan Network+9
2. Disabled Veterans are generally exempt
If you're receiving VA compensation for a service-connected disability, you're exempt from paying the VA's Funding Fee. Benefits+8Veterans Affairs+8VA Loan Network+8
3. Pending disability claims? You can get reimbursed—but only under the right conditions
If your disability compensation comes through later—and its effective date is before your loan closing—you’re eligible for a refund of the funding fee. Money+14Veterans Affairs+14VA Loan Network+14
But if your claim wasn’t adjudicated before closing, the lender collects the fee. You can still request a refund later, once your claim is approved and retroactive, but it will take extra steps. Benefits+3Benefits+3Benefits+3
4. Purple Heart recipients on active duty are exempt, too
If you’re active duty and have a Purple Heart, you don’t pay the funding fee.
Quick Reference
| Situation | Does Fee Apply? | Can It Be Rolled Into Loan? | Notes |
|---|---|---|---|
| Funding Fee generally | Yes | Yes | It’s the only closing cost that can be rolled into the loan. |
| Receiving VA disability compensation | Exempt | — | No fee due. |
| Pending disability rating, effective pre-closing | Collected initially; can get refunded | — | Refund possible later with retroactive determination. |
| Active duty with Purple Heart | Exempt | — | Document Purple Heart before closing. |
Local Context & Tips for TX, FL, AL, CO, TN
Across Texas, Florida, Alabama, Colorado, and Tennessee, VA loans offer a valuable path to homeownership—with zero down and no private mortgage insurance (PMI). Rolling the funding fee into your loan is a smart way to reduce upfront costs, especially in hot markets like Austin, Tampa, or Nashville.
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Tip: If you’re eligible for an exemption, bring your documentation—VA disability award letter or Purple Heart proof—to your lender before closing. Better yet, get your Certificate of Eligibility (COE) updated early.
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If your claim is still pending, expect to pay the fee at closing—but don’t forget to apply for a refund later. The VA will only refund you if the effective date of your disability compensation predates the closing.
Final Word
Roll that funding fee into your loan to keep upfront costs low. If you're a disabled Veteran, Purple Heart holder, or have a retroactive disability claim—you can avoid or recover that fee entirely.
Staying informed = keeping more money in your pocket while gaining a home. You’ve earned it!
About Between Two Doors
Between Two Doors is a podcast where I talk with Realtors about their journey, aiming to connect home buyers and sellers with agents on a more personal level. I ask “right brain” questions that go beyond transactions, focusing on the experiences, values, and passions that make these professionals great at what they do.
Listen to more episodes at: https://www.betweentwodoors.com
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