Being exempt from paying the funding fee is a big deal. It is not only a big chunk of change that does not get added to your loan balance, but it is a policy that can provide other huge advantages.
Let’s look at a specific example and run some exact numbers. The financial health of the VA Guaranty is the funding fee. For a first time user, on a purchase loan, the VA funding fee is 2.15% on a zero down payment loan. As an example, if you are borrowing $300,000 for a no down payment purchase loan, 2.15% or $6,450 is added to your loan balance for a total loan amount of $306,450. Yet if you are receiving disability benefits, you are exempt from the VA funding fee, a savings of $6,450! That is a distinct advantage! All of the people who are fortunate enough to not receive disability benefits are supplementing you. You are getting the same amazing VA Home Loan Benefit, even though you aren’t paying the funding fee, all while you are getting a very reasonable sum of tax-free money paid to you monthly in your disability income.