The VA requires that Veterans’ funding fee exemption information is up-to-date at the time of closing to avoid incorrect charges to exempt Veterans. Lenders may not advise Veteran borrowers who believe they are exempt from paying the funding fee to close on a loan without first establishing the borrower’s funding fee exemption status.
This announcement addresses updated VA Funding Fee and IRRRL Certificate of Eligibility (COE) requirements from Circular 26-19-17 Change 1 and Change 2:
The VA Full Doc and IRRRL Guidelines will be updated to reflect these changes.
Effective immediately, a COE will be required for all VA IRRRLs to determine whether the Veteran borrower has a funding fee exemption, except in the following three situations:
Please note: The spouse of a Veteran who is now deceased, will not be considered exempt from the VA Funding Fee unless (s)he is in receipt of DIC. Lenders may remit VA Form 26-8937, Verification of VA Benefits, to the RLC of jurisdiction to verify a surviving spouse’s exempt status.
For all loans (Full Doc and IRRRL) where the COE does not show the Veteran is exempt from paying the funding fee, the Veteran must answer the following questions:
If the Veteran has a claim for compensation pending with VA, an updated COE must be obtained within three (3) days of the note date using the COE “Correct” function in WebLGY.
If an Active Duty Servicemember has a pre-discharge claim pending, the Lender must contact the Regional Loan Center (RLC) by email to request assistance in obtaining a proposed or memorandum rating to determine if the Servicemember may be exempt from paying the funding fee as noted above. Form 26-8937, Verification of VA Benefits, must be submitted in addition to the email to the RLC to ensure the RLC is aware of the need for the proposed or memorandum rating. If a proposed or memorandum rating is not obtained and loan closing takes place, the Servicemember is not eligible for funding fee exemption.
Please contact CorrespondentRM@carringtonms.com with any questions.
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Consumer Access Web Site: www.nmlsconsumeraccess.com.
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Government Agency Approval | FHA Non-Supervised Mortgage Approval #: 24751-0000-5 | VA Automatic Lender Approval #: 902324-00-00