The VA is at it again, screwing over as many people as they can because someone somewhere wasn’t doing his or her job, at least that’s what the Inspector General report is accusing senior VA officials of doing.

Yesterday it was medical and today it’s housing. What’s sad is, the VA really could be great, and instead, they’re blinding themselves to things like disabled veterans being exempt from a funding fee. You might be thinking, well it’s up to the veteran and lender to catch this and apply for the exemption when they purchase their house using a VA home loan.


According to the VA’s policy, a veteran who purchases or refinances a home and pays a funding fee, if their rating comes back and is retroactive to before the loan finalization date (using a VA loan), then the VA has to refund the veteran their funding fee. Some veterans don’t know this, but the VA does.

In fact, the VA had it brought to their attention that they owed veterans over $150 million and needed to return the funding fee to veterans who qualified—this was way back in 2014 according to KARE 11 and now it’s about $189 million owed to an estimated 53,200 veterans.

Now, for the veterans who are authorized this refund, you could have had it five years ago, but the VA is still, for some reason failing to do their job. They haven’t even taken the time to notify veterans that they owed them money and will “eventually” pay them back.

So, if you paid a funding fee as a disabled veteran or you were in the middle of a pending disability rating during your purchase/refinance and ended up getting a retroactive rating after the purchase or refinance of your home, you might just want to give the ol’ VA a call and remind them they owe you money. Because you know the second you owe them money they’ll be sure you know about it.

We should also mention, a funding fee can be as much as 3.3% of your home loan, so you’re looking at significant savings by qualifying for a funding fee exemption – unless of course, the VA doesn’t honor their own policy.

To see if you qualify for a VA funding fee exemption, read our blog: What is a VA Funding Fee Exemption