A funding-fee exemption may lower your upfront cost
Receiving VA compensation for a service-connected disability generally qualifies you for exemption from the VA funding fee. A 100% disability rating is not required for this benefit. Other qualifying categories include compensation eligibility when receiving retirement or active-duty pay instead, certain DIC recipients, qualifying pre-discharge ratings and active-duty Purple Heart recipients.
Verify the exemption before closing
Ask Sasha and your lender to confirm your status using the applicable VA process before closing. Do not assume you should pay a fee now and recover it later. If VA awards compensation after closing with an effective date before closing, a refund may be available, subject to VA review.
How disability income enters the conversation
VA disability compensation is tax-free. A lender can review documented benefit income for qualification. Verified continuing nontaxable income may receive an adjustment for debt-to-income analysis, but residual-income analysis uses actual income. There is no universal gross-up percentage to apply to every borrower and every calculation.
Adapted-housing grants are a separate resource
Specially Adapted Housing, Special Home Adaptation and Temporary Residence Adaptation assistance may help with housing needs related to qualifying service-connected disabilities. Each program has specific eligibility and residence or ownership requirements. Ask VA about current limits and the application process.
California property taxes: a different eligibility test
California’s Disabled Veterans’ Exemption generally requires a qualifying service-connected 100% rating, compensation at the 100% rate due to individual unemployability, or other qualifying statutory circumstances. Certain unmarried surviving spouses may qualify. The county assessor determines eligibility for the residence; a VA funding-fee exemption does not automatically establish property-tax eligibility.
A practical benefit review with Sasha
Discuss your funding-fee status, income documentation, target property and any expected tax benefit before you decide on a budget. Request secure instructions before providing an award letter or service records. Use our California county directory to contact the assessor directly.
Read the official guidance
VA • Funding fees & closing costs ↗VA • Verify funding-fee exemption before closing ↗VA • Disability compensation ↗Federal regulation • VA underwriting ↗VA • Disability housing grants ↗VA • Apply for adapted-housing assistance ↗California BOE • Disabled Veterans’ Exemption ↗Sources reviewed October 25, 2026. Requirements can change. Ask Sasha to help apply the information to your situation.