What Is the VA Funding Fee?
The VA funding fee is a one-time charge added to most VA home loans. It’s paid by eligible Veterans, service members, or surviving spouses to help keep the VA loan program self-sustaining and affordable for future borrowers.
Because VA loans don’t require down payments or monthly mortgage insurance, this small fee helps offset costs to taxpayers while maintaining the powerful benefits of the VA program.
Learn more about VA loan benefits and how they work on our VA Loan page, or visit our FAQ for answers to common VA loan questions.
Who Has to Pay the VA Funding Fee?
If you’re buying, refinancing, or building a home with a VA-backed loan, you’ll typically pay the funding fee. However, some borrowers qualify for a full exemption.
You do not have to pay the VA funding fee if:
- You receive VA disability compensation for a service-connected condition.
- You’re eligible for VA compensation but are instead receiving retirement or active-duty pay.
- You’re a surviving spouse receiving Dependency and Indemnity Compensation (DIC).
- You have a proposed or memorandum rating before closing that shows you qualify for disability compensation.
- You’re on active duty and can show proof of receiving a Purple Heart before or on your loan closing date.
Can I Get a Refund of the Funding Fee?
Yes — if you later receive VA disability compensation with an effective date before your loan closed, you may qualify for a refund.
However, if the effective date of your compensation is after closing, a refund isn’t available. To check eligibility or start a refund request, contact your VA Regional Loan Center at 877-827-3702 (TTY: 711), Monday through Friday, from 8:00 a.m. to 6:00 p.m. ET.
How Do I Pay the Fee?
You’ll pay the funding fee when you close your loan, either by:
- Financing it — rolling it into your total loan amount, or
- Paying it upfront at closing.
Most Veterans choose to finance the fee, keeping out-of-pocket costs as low as possible.
What Determines the Funding Fee Amount?
The amount you’ll pay depends on several factors:
- Loan type (purchase, refinance, construction, etc.)
- Loan amount
- Down payment percentage
- Whether it’s your first or subsequent use of the VA loan benefit
Your lender will calculate the exact amount and include it in your loan estimate.
Current VA Funding Fee Rates
VA Purchase and Construction Loans
| Down Payment | First-Time Use | Subsequent Use |
|---|---|---|
| Less than 5% | 2.15% | 3.3% |
| 5% or more | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
Example:
Buying a $200,000 home with a 5% down payment ($10,000)? The fee would be 1.5% of $190,000, or $2,850.
Cash-Out Refinance
| Use | Funding Fee |
|---|---|
| First Use | 2.15% |
| Subsequent Use | 3.3% |
Native American Direct Loan (NADL)
| Type | Funding Fee |
|---|---|
| Purchase | 1.25% |
| Refinance | 0.5% |
Other VA Loan Types
| Loan Type | Funding Fee |
|---|---|
| IRRRL (Streamline Refinance) | 0.5% |
| Manufactured Home (not permanently affixed) | 1% |
| Loan Assumption | 0.5% |
| Vendee Loan (VA-owned property) | 2.25% |
Bottom Line
The VA funding fee makes it possible for millions of veterans to purchase homes with no down payment and no monthly mortgage insurance, while keeping the program strong for future service members.
If you’re unsure whether you qualify for an exemption — or want to calculate your exact fee amount — Scott Carlin can help you understand your options. Scott is a 20-year Air Force veteran and VA loan specialist (NMLS# 2613509) serving military families in Florida and Texas.
Call 321-364-4461 or visit our Schedule a Call page to book a free consultation.
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