VA Loan Reader Questions: VA Loan Funding Fee Exemptions
A reader asks, “I am the disabled veteran and my husband is a also a veteran but not disabled. My husband has the excellent credit history and salary requirements that will get us the low interest rate, however I am able to exempt us from the funding fee because of my disabilities.”
“Is there a way for my husband to get the loan with the exempt funding fee without me being on the mortgage because of my low 650 credit score? What would be the best way to go about this?”
VA loan funding fee exemptions aren’t transferable. A loan applicant who receives or is eligible to receive compensation for VA-recognized service-connected disabilities is also eligible for a VA loan funding fee exemption.
In this particular case, the reader might be better served applying along with the spouse for a VA mortgage. Many lenders are willing to work with borrowers with FICO scores that start at 640, so it’s entirely possible that in this particular case credit scores might not be an issue.
If the borrowers decide that in this case, having only one VA loan applicant on the mortgage is the right way to go, the applicant who has a VA loan funding fee exemption may use it; the borrower who is not entitled to such an exemption cannot.
Borrowers who aren’t sure if they qualify for a VA loan funding fee exemption or not should contact the Department of Veterans Affairs directly by calling 1-800 827-1000. In some cases a borrower who is being evaluated by the VA for a disability claim may be able to apply for an exemption which would apply pending the outcome of the VA review. In other cases a borrower may be required to wait until the VA makes a determination before getting an exemption.
VA loan funding fee exemptions are not automatic–they must be applied for. Your loan officer can help in these cases, or you can get assistance from the Department of Veterans Affairs at the number provided above.
Do you have questions about VA home loans? Ask us in the comments section.