The VA funding fee is something every veteran has to pay unless you meet one of the exemption requirements.
The VA funding fee is a one-time fee paid to the Department of Veterans Affairs (VA) to reduce taxpayer burden and ensure the program's longevity for future generations.
The Department of Veterans Affairs charges a one-time funding fee on VA loans. These fees go directly toward supporting the VA loan program and should not be confused with origination fees — which are fees charged by your lender.
For the most part, all VA loans come with a funding fee, though there are some exceptions. In some cases, a VA borrower may be exempt from the fee. It may also be rolled into the loan amount and paid off over time.
The exact funding fee you’re charged depends on the type of loan you’re getting, your loan balance, the size of your down payment, and the number of times you’ve used your VA loan benefit. Generally speaking, you’ll pay less for your funding fee the larger your down payment is.
See this VA funding fee chart to gauge how much you’ll likely owe on a VA purchase or construction loan:
|Down Payment||Fee for First Use||Fee After First Use|
|5% to 10%||1.65%||1.65%|
|10% or More||1.40%||1.40%|
If you’re using a product other than a VA purchase or construction loan, here’s how those funding fees break down:
|VA Loan Type||Funding Fee|
|Cash-out refinance||2.3% on first use, 3.6% on subsequent uses|
|NADL||1.25% for purchases, 0.5% on refinances|
|Manufactured home loans||1%|
If you can’t afford your funding fee, you have the option to finance it. Your lender can simply add the fee to your total loan balance, and you’d pay it off monthly, as you do the rest of your mortgage.
Not every borrower has to pay the VA funding fee. Some Veterans and service members are exempt due to disability status or military honors.
Here are the borrowers who are currently exempt from VA funding fees when using their loan benefit:
If you’re unsure if you qualify for an exemption, look to your Certificate of Eligibility. It should indicate if you’ll need to pay a funding fee.
If you’re awarded disability compensation after your VA loan closes, you may qualify for a funding fee refund. To apply for this, you’d need to talk to your VA Regional Loan Center for more guidance.