VA Funding Fee

What Is the VA Funding Fee?

The VA funding fee is a one-time fee charged by the Department of Veterans Affairs on most VA loans. It helps fund the VA home loan program so it can continue to offer no down payment and no monthly mortgage insurance. The fee is a percentage of your loan amount and depends on whether you're using your VA benefit for the first time, whether you're making a down payment, and — in some cases — whether you're exempt.

Funding Fee Rates (First Use vs. Subsequent Use)

If this is your first time using your VA home loan benefit: with no down payment, the fee is typically 2.15%. With 5% to 10% down, it drops to 1.5%; with 10% or more down, it's 1.25%. If you've used your VA benefit before (subsequent use): with no down payment, the fee is typically 3.3%; with 5% to 10% down, 1.5%; with 10% or more down, 1.25%. Putting money down can reduce the fee and your loan amount — we can run the numbers for your situation on our VA loans page or during a strategy session.

Who Is Exempt from the VA Funding Fee?

You do not pay the funding fee if you receive VA compensation for a service-connected disability, or if you're eligible to receive it but are receiving retirement or active-duty pay instead. Surviving spouses receiving Dependency and Indemnity Compensation (DIC) are also exempt, as are certain Purple Heart recipients. If you're exempt, your COE will typically indicate it — and that can save you thousands. We'll make sure your file reflects your exempt status so you're not overcharged.

Paying the Fee: At Closing or Rolled Into the Loan

Most borrowers roll the funding fee into the loan so they don't have to pay it out of pocket at closing. That increases your loan amount and your monthly payment slightly, but it keeps cash in your pocket. You can also pay it in full at closing if you prefer. We'll show you both options so you can decide what works best for your goals. For more on how we structure VA loans and keep costs clear, see our VA loan overview.