What Is VA Funding Fee?
VA Funding Fee: A one-time fee on most VA loans, from 1.25% to 3.3% of the loan, that can be financed.
The VA funding fee is a one-time charge on most VA purchase and refinance loans. It funds the VA loan program and takes the place of monthly mortgage insurance.
Purchase funding fee
| Down payment | First use | Subsequent use |
|---|---|---|
| Less than 5% | 2.15% | 3.3% |
| 5% to under 10% | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
Paying it
Most borrowers finance it into the loan. On a $350,000 loan with no down payment and first use, the fee is $7,525, making the loan $357,525.
Who's exempt
- Veterans receiving VA compensation for a service-connected disability
- Surviving spouses receiving Dependency and Indemnity Compensation
- Purple Heart recipients on active duty
- Some others, as shown on your Certificate of Eligibility
Good to know
If you're awarded disability compensation after closing, effective before closing, you may be able to get the fee refunded.