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VA Home Loans: Will You Receive a Refund?



On June 6, 2019, the 75th anniversary of D-Day, the VA Inspector General released a report that details how more than 53,000 disabled Veterans may be owed refunds for VA home loan funding fees that they were incorrectly charged for. These Veterans are owed an estimated $189 million. 

The 73,000 Veterans affected by the refunds were charged these fees from 2012 to 2017, and the VA seems to have known about this problem since 2014. The VA has issued an estimated $97 million in refunds to 19,700 of these Veterans, but they still owe refunds to 53,200 more Veterans. 

Here’s how you can find out if you are one of these affected Veterans—and whether you can expect a refund from the VA.


How to Tell if You’re Eligible for a VA Home Loan Refund

Know Your Exemption Status

The VA uses funding fees to defray the costs they incur when they grant home loans to Veterans. Most Veterans have to pay these fees, but some Veterans may be exempt from paying funding fees if they meet the following criteria:

  • You receive disability compensation from the VA for a service-connected disability.

  • You would be entitled to receive VA disability compensation if you weren’t receiving retirement or active duty pay.

  • You are the surviving spouse of a Veteran who died in service or of a service-connected disability.

If you meet any of these criteria and you paid funding fees for a VA home loan any time from 2012 to 2017, you may be eligible for one of these refunds.


Find Out if You Are Retroactively Eligible

In some cases, exempt Veterans may have been charged with home loan funding fees because they were awarded a certificate of eligibility (COE) for disability compensation after their loan was closed. 

If you think you may have been in this situation between 2012 and 2017, you should check your loan closing dates against the date you were awarded compensation. If it turns out that you were retroactively eligible for exemption from funding fees, then you could be eligible for a funding fee refund from the VA.


What Happens Next?

Even if you are sure that you are eligible for one of these refunds, it could take months for you to receive it. The VA Loan Guaranty Service has drafted a plan to begin issuing refunds to the remaining 53,200 eligible Veterans, and they aim to implement that plan by July 31, 2019. 

However, they have not clarified when they expect to issue the funds to eligible Veterans. So you may have to wait for your refund until the Loan Guaranty Service works out the details of issuing the refunds. Even so, you should organize all of your paperwork if you believe that you are eligible for one of these refunds. That way, you will be prepared to actively pursue accessing your refund if you need to do so.


Financial Assistance for Missouri Veterans

We are deeply invested in helping secure Missouri Veterans’ benefits. That’s why we offer financial assistance services that let Veterans access the care and compensation that they need. Contact us today if you’d like us to help you figure out if you are owed one of these funding fee refunds.

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