News · Oct. 18, 2026
VA funding fee refund: how Chicago veterans get the fee back after a disability rating
Short answer
You can get a VA funding fee refund if VA awards you disability compensation with an effective date before your loan closing date. On a first-use, zero-down $400,000 Chicago purchase that is $8,600 back. Start by contacting your lender or loan servicer, or VA’s regional loan center at 877-827-3702. A proposed or memorandum rating issued after closing does not qualify.
Who qualifies for a refund
| Situation | Refund? |
|---|---|
| Rating awarded after closing, effective date before closing | Yes |
| Rating awarded after closing, effective date after closing | No |
| Proposed or memorandum rating issued after closing | No |
| Exempt at closing but charged by mistake | Yes; ask your lender to correct it |
| Purple Heart shown on or before closing (active duty) | Exempt; should not have been charged |
The effective date on your VA award letter is what matters, not the date you receive the letter. Claims filed before closing often come back with an effective date that reaches back to the filing date.
How to request it
- Get your award letter showing the service-connected rating and its effective date.
- Contact your lender or loan servicer and ask them to request the refund, or call VA’s regional loan center at 877-827-3702.
- Confirm your loan number and closing date so VA can match the fee it collected.
- Watch for the payment. VA sends the refund to you. Veterans United reports that most arrive within about 10 business days of the request.
What the refund is worth
| Loan | Fee rate | Refund |
|---|---|---|
| $300,000, first use, $0 down | 2.15% | $6,450 |
| $400,000, first use, $0 down | 2.15% | $8,600 |
| $400,000, after first use, $0 down | 3.3% | $13,200 |
| $320,000 IRRRL | 0.5% | $1,600 |
If you rolled the fee into your loan, the refund does not lower your balance automatically. You can keep it or make a principal-only payment to cut interest. Ask a tax professional how to treat it on your return.
Avoid paying it in the first place
- If you have a claim pending, tell your lender before closing. A rating that comes through before closing makes you exempt.
- Check that your Certificate of Eligibility shows the exemption. Getting your COE.
- Service members can be exempt with a pre-discharge rating issued before closing.
Disabled veterans in Chicago also qualify for Cook County property tax exemptions and VA housing grants. All disabled veteran benefits.
Common questions
Who gets a VA funding fee refund?
Veterans awarded VA disability compensation with an effective date before their loan closing date. A proposed or memorandum rating issued after closing does not qualify.
How do I get a VA funding fee refund?
Contact your lender or loan servicer, or VA’s regional loan center at 877-827-3702, with your award letter showing the effective date.
How long does a VA funding fee refund take?
Veterans United reports most refunds arrive within about 10 business days of the request.
Sources
What will your VA funding fee be?
Enter a price and down payment to see the 2026 fee, or check whether you are exempt.
An independent guide. Not affiliated with or endorsed by the U.S. Department of Veterans Affairs, and not a lender. General information, not legal, tax or financial advice.