Certain Circumstances Warrant the Refund of the VA Funding Fee
There are a couple of situations that warrant the refund of the VA Funding Fee.
- The Funding Fee collected was miscalculated or overpaid
- There was a pending disability compensation claim when the loan was closed and the fee was collected as if the borrower was not exempt
VA loans have advantages for some borrowers that are eligible and qualify because they do not require a downpayment. But there are some conditions that apply. See if you qualify for a VA loan here.
The VA Funding Fee can range from .5% of the loan amount on a refinance to 3.3 % for subsequent borrowers. This can amount to a lot of money charged to the Veteran that uses his VA loan. The fee is collected at closing and remitted to the Department of Veterans Affairs within 15 days of closing.
If the fee was paid in cash at closing then the Veteran will receive the refund in cash. If it was added to the loan balance then a credit to the loan balance will be made.
Veterans are encouraged to contact their lender or the VA Regional Loan Center to request a refund if it is determined they were entitled to disability compensation retroactively to a date prior to loan closing.
Some Veterans or surviving spouses are exempt from paying the Funding Fee at the closing if they meet one of the following conditions:
- Veteran receives compensation for a service-connected disability
- Veteran would be entitle to compensation for a service-connected disability if they didn't receive retirement pay
- Veteran is rated as eligible to receive compensation as a result of a pre-discharge medical examination and rating or based on a pre-discharge review of existing medical records or treatment records that resulted in a memorandum rating
- Veterans on active duty that are deemed entitled though not yet receiving compensation
- Surviving spouses of Veterans who died from service related injuries or disabilities
You can see all the regulations in this VA Loan Information Sheet
Are VA Funding Fees Refundable? Yes, in certain situations they are.
For more information about using a VA loan or to find out if you are exempt from the Funding Fee contact Clarksville TN Real Estate Agent, Debbie Reynolds at 931-320-6730.
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