Disability Rating and the Funding Fee Waiver
VA—not the lender—determines funding-fee exemption status. Current categories include certain compensated or entitled Veterans, qualifying surviving spouses, predischarge ratings, and active-duty Purple Heart recipients.
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Got a VA disability rating? A VA funding fee may appear on your closing disclosure — but with a qualifying disability rating, the VA funding fee can be waived. Completely. Check your Certificate of Eligibility and look for “funding fee exempt.” Exemption generally applies when you receive VA disability compensation; a rating or pending claim alone is not the final test, and VA confirms exemption status on your COE. Loan approval and program requirements apply. Bolt Home Loans LLC, NMLS #2784913. Not affiliated with the VA or any government agency.
Who's exempt
A Veteran receiving VA compensation for a service-connected disability, or eligible to receive it but receiving retirement or active-duty pay instead.
Qualifying surviving spouses, including those receiving Dependency and Indemnity Compensation and those covered by the service-connected-death exemption, may be exempt. VA must determine the fee status shown on the COE; do not infer it from survivor eligibility alone. A service member with a qualifying proposed or memorandum rating before closing, or an active-duty Armed Forces member who provides evidence by closing of receiving a Purple Heart, may also be exempt.
Proving exemption at closing
Before closing, compare the current COE, award or compensation record, and any VA status response used by the lender. If the COE does not show an expected exemption, ask the lender to request VA confirmation rather than omitting the fee based on an assumed rating.
An arbitrary disability percentage or a pending claim alone does not establish exemption. For the predischarge path, the proposed or memorandum rating must exist before closing and meet VA's stated category. Active-duty Purple Heart recipients must provide the required evidence by closing.
Refunds if you already paid it
Example one: a borrower pays the fee at closing, and VA later awards qualifying compensation with an effective date before that closing. That effective date may support a refund review. VA decides whether the category and records qualify and the amount, if any.
Example two: a later award has an effective date after closing. That does not satisfy VA's stated retroactive effective-date test for refunding the earlier fee. Likewise, a proposed rating first issued after closing does not create refund eligibility on the predischarge-rating basis.
A funding-fee exemption or refund does not remove appraisal, title, recording, taxes, insurance, discount points, lender charges, or other transaction costs. Keep the closing disclosure, COE, award letter, effective-date record, proof of fee payment, and loan details for VA's review.
Not sure this applies to you?
We can help request your COE and review the result with you. VA may require supporting records, and timing varies by case.
Official VA guidance
Eligibility and benefit determinations belong to VA. Review the current primary guidance before acting on this summary.
Sources checked September 25, 2026. Professional review pending for this revision.