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VA home loan funding fee waiver, and property tax breaks
Two of the biggest dollar benefits most rated veterans never add up: the funding fee waiver on a VA loan (often thousands of dollars) and your state property tax exemption.
At a glance
| Funding fee waiver | You pay no funding fee on a VA loan if you receive VA compensation for a service-connected disability (any rating 10%+), or you would but you get retired pay instead, or you are a surviving spouse on DIC, or you have a pre-discharge memorandum rating, or an active-duty Purple Heart |
| What it saves | First-use purchase with under 5% down: 2.15% of the loan. On a $400,000 loan that is $8,600. Repeat use: 3.3%. Refinance (IRRRL): 0.5% |
| How | Your Certificate of Eligibility (COE) shows "exempt." Request it online, through your lender, or with VA Form 26-1880. If your rating came through after closing, you can apply for a refund |
| Property tax | Set by each state, usually at 100% P&T, sometimes at 50% or 70%, sometimes any rating. Find your state |
| Official page | va.gov funding fee |
Traps
- A pending claim at closing: if your rating is granted after you close, ask the lender and VA for a funding fee refund. It is not automatic.
- Tax deduction (new in 2026): VA announced that funding fees paid in 2026 can be deducted on federal taxes. The legal basis and which tax years it covers should be confirmed with a tax professional. Needs verification
- Property tax exemptions have deadlines (often mid-year) and residency rules, and some require re-filing each year. Your county assessor is the office that matters.
- "100% P&T" vs "TDIU": some states count TDIU as 100%, some do not. Colorado does, since 2025. Check your state page.
Sources
- VA funding fee and closing costs (page updated Oct 5, 2026)
- VA loan fee table (benefits.va.gov) (page updated May 26, 2025)
- VA Form 26-1880 (COE) (form revised Dec 2025)
- VA News: borrowers can deduct funding fees (Feb 18, 2026)
All links checked and content verified on Oct 16, 2026. Rules change; confirm on the official page before you act.