Purple Heart Recipients Can Save Thousands of Dollars on VA Loan Fees

If you are looking for a home loan and have obtained a Purple heart you may be able to save thousands of dollars on your loan with a new law that comes into effect early next year.

Purple Heart recipients will be exempt from any fundraising fees that the Department of Veterans Affairs charges on their guaranteed home loans from January 1, 2020.

Finance costs can range from 1.25% to 2.4% of the loan value for first-time home buyers. According to Zillow.com, the average home value in the United States is around $ 227,000. This means that if you are a recipient of Purple Heart, you could potentially be exempt from paying finance charges of over $ 5,000 when you get a VA home loan.


Disabled veterans have been exempt from paying fundraising fees since 1982, but language hidden deep in Public Law 116-23, known as the Blue Water Navy Vietnam Veterans Act of 2019, also exempts Purple Heart recipients in active service of payment of fees.

This means that those who have Purple Hearts but are currently on active duty and therefore do not yet have a VA disability rating can now qualify for the exemption. The law was signed by President Donald Trump on June 27, 2019.

Much of the new law deals with extending VA disability benefits for Agent Orange exposure to those who served on ships off the coast of Vietnam during the war. Previously, only those serving in the country or in inland waters were eligible for disability benefits. The law also directs VA to use the proceeds of fundraising fees to pay for these expanded benefits. In the past, finance charges were only used to cover administrative costs associated with the VA home loan program.

Starting next year, to qualify for the exemption, you must provide proof of your Purple Heart award to the lender and the VA before the loan closing date.

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