VA Loan Benefits for Surviving Spouses
If you are the surviving spouse of a veteran who died in service or from a service-connected disability, the VA funding fee is waived. There are also paths to keep the VA loan already on your home.
What the funding fee exemption means
The largest single cost on most VA loans, removed.
- Surviving spouses of veterans who died in service or from service-connected disabilities are exempt from paying the VA funding fee.
- The exemption applies whether or not the surviving spouse is a veteran with their own entitlement, and whether or not their own entitlement is being used on the loan.
- The surviving spouse must be in receipt of Dependency and Indemnity Compensation before the loan closes.
- On loans where a funding fee does apply, it can be financed into the loan rather than paid at closing.
- Eligibility for VA financing is determined by the VA and evidenced on the Certificate of Eligibility.
- VA financing is for a primary residence. The borrower occupies the home.
Funding fee exemption
Dependency and Indemnity Compensation
Taking over an existing VA loan
Certificate of Eligibility
Primary residence purchase
Refinance options
Keeping The VA Loan That Is Already On The House
When a veteran passes away, the loan does not automatically follow the same path for every household.
VA interest rate reduction refinance guidelines address this directly through what lenders call a change of obligor. Where the existing VA loan was in the name of the veteran and spouse together, and the veteran has passed away, the surviving spouse alone can be the borrower on the new loan. That is the clearest documented path, and it is a common one.
Where the existing loan was in the name of an unmarried veteran only, the same refinance is not available to a spouse afterward. The same answer applies to a different spouse alone after the veteran has passed. These are not judgment calls at the underwriting desk. They are stated outcomes in the guidelines, and knowing them in advance saves months.
The documentation for a change of obligor is straightforward. Expect to provide the death certificate, a statement from the remaining obligor addressing the ability to make payments on the new loan, and a review of the mortgage payment history. On an interest rate reduction refinance, a Certificate of Eligibility is generally not required, but evidence of the funding fee exemption is.
What to know before you start
Six things that shape a surviving spouse file.
DIC Has To Be In Place Before Closing
The funding fee exemption is conditioned on receipt of Dependency and Indemnity Compensation before the loan closes. If the claim is pending, the timing of the loan and the timing of the award need to be coordinated.
The Cause Of Death Matters To Eligibility
The documented exemption covers veterans who died in service or from service-connected disabilities. Other circumstances are handled by the VA directly, and the determination shows up on the Certificate of Eligibility rather than being made by a lender.
The Certificate Of Eligibility Drives Everything
On a purchase, lenders generally want the certificate dated within six months of application. It identifies the entitlement available. Requesting it early is the single most useful thing you can do at the start.
A Credit Score Is Required
VA programs require at least one usable credit score returned on a merged credit report, and nontraditional credit is not accepted on these programs. If credit has been dormant, that is worth addressing before applying.
DIC Can Be Documented As Income On Other Loans
On some conventional jumbo programs, VA disability income for surviving spouses is documented through the Certificate of Eligibility, with the income reflected in the conditions section and the certificate dated within a set window of the note date.
Benefits For Children Have Their Own Documentation
Where additional benefits are received for dependent children, verification of the children’s ages is required to establish that the income continues for at least three years.
Hear From Homeowners Like You
Frequently Asked Questions
Questions surviving spouses ask us.
Not if you are the surviving spouse of a veteran who died in service or from a service-connected disability and you are in receipt of Dependency and Indemnity Compensation before closing. That combination is what the guidelines require for the exemption.
Eligibility determinations and the certificate itself come from the VA, not from a lender. We can tell you what the certificate needs to show and how it gets used in the file, and we work with it once you have it.
Yes. Where the existing VA loan was in the name of the veteran and spouse and the veteran has passed away, the surviving spouse alone can be the borrower on an interest rate reduction refinance.
Not through the VA interest rate reduction refinance. The guidelines specifically address that scenario and it is not eligible. There may be other refinance options depending on the equity and your income, and we are glad to look at them with you.
For a change of obligor, the death certificate, a statement about your ability to make payments on the new loan, and the mortgage payment history. For a purchase, the Certificate of Eligibility and standard income and asset documentation.
No. VA financing is for a primary residence that the borrower occupies. Investment property financing runs on entirely different programs.
It depends on the loan program. On some conventional jumbo programs, VA disability income for surviving spouses is documented through the Certificate of Eligibility. We look at the specific program and confirm the treatment before relying on it.
In many cases yes. Widow is the word most people search for and surviving spouse is the word the VA uses, and here they mean the same thing. A surviving spouse may be able to get a Certificate of Eligibility if they are eligible for or already receiving VA Dependency and Indemnity Compensation, or if they are the spouse of a service member who is missing in action or being held as a prisoner of war. The Certificate of Eligibility is what settles it, so it is worth requesting rather than assuming the answer is no.
No, these are two different situations and they run on different paperwork. A living veteran buying a home together with a husband or wife is a joint VA loan, and it runs off the veteran’s entitlement. That is covered on our VA joint loan page. A surviving spouse using the benefit in their own name is what this page covers, and it runs off a Certificate of Eligibility issued to the surviving spouse.
Find out what you qualify for
This is one of the areas where getting the sequence right matters more than getting the rate right. Request the Certificate of Eligibility first, confirm your Dependency and Indemnity Compensation status, and then talk to us. We will map out which path is actually open to you before you fill anything out.
Get Pre-Qualified- Department of Veterans Affairs, eligibility for VA home loan programs
- Department of Veterans Affairs, VA home loan types
- Department of Veterans Affairs, VA funding fee and closing costs
VA loan eligibility is determined by the Department of Veterans Affairs and is evidenced on the Certificate of Eligibility. Funding fee exemptions, refinance eligibility, and documentation requirements vary by program and investor and are subject to change. Saxton Mortgage is not affiliated with or acting on behalf of any government agency. Not all applicants will qualify. This is not a commitment to lend.