e. If Exempt Status Cannot be Determined

If the veteran’s exempt status cannot be verified prior to loan closing, the funding fee must be remitted as if the borrower was not exempt. 

Indicate in the closing package that the veteran claims exempt status.  VA will determine the borrower’s status and refund the funding fee if appropriate. 

Reference:  Refer to the heading “Refunding Overpayments to the Veteran” in this section.

If the veteran has a pending disability compensation claim at the time of loan closing, the funding fee must be remitted as if the borrower was not exempt.

Advise the veteran to contact the VA regional loan center to request a refund if it is later determined that the veteran is entitled to compensation retroactively to a date prior to loan closing.

Reference:  Refer to the heading “Refunding Overpayments to the Veteran” in this section.

f. How to Calculate the Funding Fee

For all loans except IRRRLs, apply the appropriate percentage (from the funding fee tables) to the loan amount. 

If the funding fee is to be paid from loan proceeds, apply the percentage to the loan amount without the funding fee amount added to it. 

For IRRRLs, calculate the funding fee by completing VA Form 26-8923, Interest Rate Reduction Refinancing Loan Worksheet.

Reference:  For joint loans, see “Calculation of the Funding Fee” in section 1 of chapter 7.