Except for exempt VA borrowers, every other VA loan borrower is charged a VA funding fee. But, the Department of Veteran Affairs has been working overtime to find over $400 million in refunds. For a while, there has been extensive conversations about the term “VA funding fee refund”. Basically, VA funding fee refunds are due to clerical errors or Veterans whose exemption status changed after closing. Unbelievably, this review goes back 20 years! So, if you got a VA loan in the last 20 years, you need to find out if you could get a refund.
VA Funding Fee Refund Initiative Results
VA’s guaranty service program found more than 130,000 VA loans which a refund was possibly due. 130,000 refunds! As mentioned, some are clerical. While other refunds resulted from a change of exemption status after closing. Meaning, VA made a decision of disability status after a closing. So, the borrower paid or financed a VA funding fee and then obtained an exempt status. Either way, the result is that there are refunds due that range from a small amount to possibly the whole fee. This could be thousands of dollars for many VA eligible borrowers.
Changes to Improve VA Funding Fee Exemption Status Notification Timing
VA announced that it has made several changes to provide lenders and Veterans with the most up to date information possible.
- Improved communication to inform Veterans of the VA funding fee & when it may be waived
- Instructions that provide lenders better knowledge to inquire of the Veteran’s disability status
- System changes for quicker and more accurate identification of fee waivers and refunds