"Is the funding fee waived if I'm 100% disabled?" I get this question all the time. The answer is better than most people expect: you don't have to be 100% anything.
This is week two of my VA loan series leading up to Veterans Day. Last week was how you qualify. This week is the fee nobody explains well.
What the funding fee is
The VA funding fee is a one-time charge paid at closing. It helps cover the cost of the program for taxpayers, and it's part of the reason VA loans can skip monthly mortgage insurance. Most borrowers roll it into the loan instead of paying it in cash.
Who doesn't pay it
According to the VA, you're exempt from the funding fee if any of these are true:
• You receive VA compensation for a service-connected disability — at any rating, not just 100%.
• You're eligible for that compensation but receive retirement or active-duty pay instead.
• You're a surviving spouse receiving Dependency and Indemnity Compensation (DIC).
• You're an active-duty service member who received a Purple Heart on or before closing.
• You're a service member with a proposed or memorandum disability rating before closing.
Straight talk: if you have a disability rating, make sure it shows up on your Certificate of Eligibility before closing. Don't assume someone else caught it. On a $350,000 loan with zero down, the first-use fee is more than $7,500.
What everyone else pays
For a purchase loan, the VA's current rates (effective April 7, 2023) are:
• Less than 5% down: 2.15% on your first VA loan, 3.3% if you've used it before
• 5% to less than 10% down: 1.5%
• 10% or more down: 1.25%
Notice what that table quietly tells you: putting just 5% down cuts the fee meaningfully, and for repeat users it's the difference between 3.3% and 1.5%. If you have some savings, it's worth asking your lender to run both scenarios.
Here's who this is for
Any veteran with a disability rating who's been told the funding fee is just "part of the deal." And anyone using the benefit a second time who wants to understand the real cost before they write an offer.
Want to read it straight from the source? The VA lays it all out here.
Every situation is different, so your actual numbers should come from a licensed VA lender. I'm happy to connect you with lenders I trust.
If you have any questions, call me — 281.944.5484. LaShambra Ewing, MBA, Broker Associate, Keller Williams Realty Southwest. VA certified, serving Houston and surrounding communities.
