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How Purple Heart Recipients Save on VA Loan Fees

At a Glance

Purple heart recipients can save thousands on VA Loan fees since the signing of the Blue Water Navy Vietnam Veterans Act of 2019.

The Purple Heart medal is awarded to service members who have been wounded or killed as a result of enemy action while serving in the U.S. military.

Purple Heart recipients are able to save thousands of dollars on their VA Home Loan.

Let’s take a closer look.

Do Purple Heart Recipients Pay the VA Funding Fee?

With the passing of the Blue Water Navy Vietnam Veterans Act of 2019, active duty Purple Heart recipients are exempt from paying the funding fee that the Department of Veteran Affairs charges on guaranteed home loans.

In order to receive the exemption, you must provide proof of your Purple Heart to the lender and the VA before closing on your loan. Only the VA can determine the eligibility of a VA Funding Fee waiver.

Here’s a breakdown of how the funding fee is currently broken down for VA purchase loans.

Current VA Funding Fee for Purchase Loans

Down Payment 1st Use After 1st Use
None 2.15% 3.3%
5% or more 1.50% 1.50%
10% or more 1.25% 1.25%

The bill enshrining this exemption into law was signed in late June 2019.

This change saves qualified VA buyers thousands of dollars. The average VA loan in 2022 was about $344,000, which means buyers are typically paying about $7,400 to $11,300 depending on their service history and prior use of the benefit.

Who Else is Exempt from the Funding Fee?

The VA Funding Fee applies to all VA purchase and refinance loans. This fee goes directly to the Department of Veterans Affairs to ensure the program keeps operating for future generations.

In addition to the Purple Heart waiver, there are other funding fee exemptions available for qualified borrowers, including:

  • Veterans receiving VA compensation for a service-connected disability
  • Veterans who would be entitled to receive compensation for service-connected disabilities if they did not receive retirement pay
  • Eligible surviving spouses

Talk with a Veterans United VA Loan Expert if you have questions about the funding fee and how this new law might impact your homebuying goals.

About Our Editorial Process

Veterans United is recognized as the leading VA lender in the nation, unmatched in our specialization and expertise in VA loans. Our strict adherence to accuracy and the highest editorial standards guarantees our information is based on thoroughly vetted, unbiased research. Committed to excellence, we offer guidance to our nation's Veterans, ensuring their homebuying experience is informed, seamless and secured with integrity.

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