VA says funding fee refund eligibility depends on disability claim effective date

Veterans who receive a service-connected disability rating after closing on a VA-guaranteed home loan do not automatically qualify for a refund of the loan's funding fee, the U.S. Department of Veterans Affairs said in a November 12 article.

According to VA, the key factor is the effective date of a Veteran's disability compensation. To be eligible for a refund, the disability claim must have an effective date that comes before the loan's closing date. VA said the effective date is generally the later of the date VA receives the claim or the date entitlement arose, and is typically not the date a decision is issued.

VA gave an example: a Veteran who closes on a home June 15 and is later granted compensation effective June 1 may qualify for a refund, while an effective date of July 1 generally would not qualify.

The department said eligible Veterans do not need to take action. VA automatically reviews rating decisions with retroactive effective dates and pays refunds directly. Veterans who believe they were charged the fee in error can have their lender submit a correction or contact VA.

VA cautioned Veterans about social media posts and videos claiming refunds are owed to anyone rated after buying a home. The funding fee is a one-time payment that helps offset program costs. Certain groups are exempt, including Veterans receiving compensation for a service-connected disability. VA's home loan line is 877-827-3702.

Source: U.S. Department of Veterans Affairs.

Originally published by True News: https://truenews.bagleyenterprises.net/stories/998