Change Date

September 15, 2004, Change 4

·  This section has been changed to create subsection lettering and references.

·  Subsections a, i and j have been changed to update electronic payment and refunding of the VA funding fee through the Funding Fee Payment System.

·  Subsection h has been changed to update the funding fee tables.

a. The Lender’s Role

The lender must

·   verify the status of any veteran who may be exempt from paying the funding fee

·   determine the amount of funding fee owed by any non-exempt borrower

·   collect the appropriate fee from all non-exempt borrowers at loan closing

·   electronically remit the funds to VA in a timely manner through the Funding Fee Payment System (FFPS)

·   print proof of payment of the funding fee, and

·   submit proof that the funding fee has been paid or that the veteran is exempt from paying the funding fee to VA with the closed loan package.

Note:  The funding fee may be paid from loan proceeds or cash from borrower.

b. Who is Exempt from Paying the Funding Fee?

The following persons are exempt from paying the funding fee:

·   Veterans receiving VA compensation for service-connected disabilities.

·   Veterans who would be entitled to receive compensation for service-connected disabilities if they did not receive retirement pay.

·   Surviving spouses of veterans who died in service or from service-connected disabilities (whether or not such surviving spouses are veterans with their own entitlement and whether or not they are using their own entitlement on the loan).