A reader asks, "I am a disabled veteran so Can I use my exemption from VA fees again?"
While the reader does not mention the VA loan funding fee by name, it's safe to assume he or she is talking about the VA loan funding fee (as opposed to closing costs, VA appraisal fess and other requirements all borrowers must pay as part of doing business with a VA loan).
Let's look at the VA loan rules that cover funding fee exemptions. At the VA official site under a section titled Loan Fee - Home Loan, we find the following:
"Generally, all Veterans using the VA Home Loan Guaranty benefit must pay a funding fee. This reduces the loan’s cost to taxpayers considering that a VA loan requires no down payment and has no monthly mortgage insurance...You do not have to pay the fee if you are a:
- Veteran receiving VA compensation for a service-connected disability, OR
- Veteran who would be entitled to receive compensation for a service-connected disability if you did not receive retirement or active duty pay, OR
- Surviving spouse of a Veteran who died in service or from a service-connected disability"
It's important to point out that the VA loan rules on funding fee exemptions do not make a distinction as to whether you are a first-time borrower or "subsequent use" borrower. Anyone who is exempt from paying the VA loan funding fee as described above can show the lender and the VA proof of that exemption in order to claim the funding fee exemption.
Unless a borrower's status as a disabled veteran has changed in eyes of the Department of Veterans Affairs, the exemption should stand regardless of being a first or second time VA loan applicant.
Do you have questions about VA home loans? Ask us in the comments section.
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