The Veterans Administration says that a number of veterans, possibly several thousand, who applied for VA-insured loans during six weeks last year are entitled to a refund of a 1 percent fee that averages about $730 for each borrower.

The agency and many lenders are still trying to figure out, though, who gets money back.

VA officials said they allowed lenders to collect a funding fee that equaled 1 percent of a borrower's total loan even though there was no law authorizing it. Borrowers paid the fee at closing, and it was to be used to cover defaults on VA-backed loans.

The problem occurred when VA home-loan legislation expired Sept. 30. An interim bill authorizing the loan program went into effect for a short period, but the final legislation was not signed until Dec. 21. Borrowers who went to settlement between Oct. 1 and Oct. 16 and Nov. 16 and Dec. 21 are eligible for the refund, but the agency doesn't know exactly how many people are affected.

In the Washington area, an estimated 800 people closed VA loans during the six weeks, VA officials said. On average, the Veterans Administration guarantees loans totaling nearly $25 million a month, said George Moerman, the agency's assistant director of loan policy.

"I would have never have known about this if my Realtor hadn't told me," said Robert L. David, chairman of American University's sociology department and a veteran who paid the fee. "But I'm still waiting for my money."

David, who served in the Army nearly 30 years ago, said he borrowed $100,000 from First Southern Mortgage Co. last October to buy a home in Silver Spring. He paid the 1 percent fee in cash as part of the closing costs and has tried since the end of October to get his $1,000 refunded.

During the six weeks when the law was not in effect, the Veterans Administration told lenders to collect the money and put the fee into an escrow account until the bill was passed and signed. While some lenders set up such an account, others did not. Some lenders told borrowers about the possibility of a refund, but many did not.

James Nalitz, a Veterans Administration loan guaranty officer, said that all lenders have been notified that they should now be returning the money. If borrowers paid the fee in cash, then lenders should be able to give them the money from the escrow account. If the fee was financed as part of the total loan, many lenders are deducting it from the outstanding loan balance.

If the lender has closed the loan and sent the loan papers and fee to the Veterans Administration, then a borrower will have to wait several weeks for a refund. In this case, the lender must send a letter authorizing the agency to reimburse the money. When the VA authorizes the reimbursement, it asks the Treasury Department to send a check for the required amount to the lender, who in turn repays the borrower.

"The problem has been trying to find out when the law was in effect and who's affected by it and who's not," said Sean O'Boyle, a loan officer with First Southern Mortgage. "There's no question that these people will get their money back."

Janet T. Maxwell, director of products for the Navy Federal Credit Union, said her office is trying to identify borrowers eligible for refunds or for the deduction from their loans.

The credit union, which has 14 offices around the country and more than 850,000 members throughout the world, serves active and retired Navy and Marine Corps personnel. Maxwell said some of the members began asking questions after reading about the VA loan funding fee problems in the Army or Navy Times.

"We tried to keep our staff informed," Maxwell said. "But it was difficult because we didn't know when Congress would finally pass the bill."

Dorsey Jones, assistant vice president of operations for the southern division of Goldome Realty Credit Corp., said she told most of her borrowers applying for loans during the six weeks that they might get a refund or a deduction from their loans.

"We've set up an internal system to check all the loans that might be affected," she said.

Robert David said he has no complaints about how the mortgage company handled the loan, but that he is frustrated that it has taken so long to get his money back.

"This has been an unpleasant experience," he said.