A lot of clients in the Military are unclear on what their Funding Fee will be if they purchase or refinance a home in the VA loan program. There are so many factors involved.
First of all, what is the VA Funding Fee? A fee charged by the Veteran's Administration to guarantee the loan to a qualified veteran. Similar to Private Mortgage Insurance.
Who is exempt from paying the Funding Fee? If you are a veteran getting disability compensation for service-related medical issues, or are entitled to get compensation if you aren't drawing retirement pay, you are exempt from the VA funding fee for your VA home loan.
Also, surviving spouses of those who died in the service, or from service related disabilities are also exempt. It doesn't matter in this case whether the spouse has any of their own entitlements. Remember that the VA has the last word on who is exempt, and some issues may be dealt with on a case-by-case basis. If you have any doubts, ask your local VA rep to review your service records (or your spouse's records) and get a determination from the VA.
Here is a chart to determine the amount of the Funding Fee. It can be either financed into the loan or paid in cash at closing. Remember it is waived if the Veteran is eligible for exemption.