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    VA Loan Guide

    VA Loan Funding Fee Explained

    Understand VA funding fee rates, exemptions, and payment options for purchase and refinance loans
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    Overview

    What is the VA Funding Fee?

    The VA funding fee is a one-time payment that helps sustain the VA loan program for future generations of Veterans. Unlike private mortgage insurance (PMI), the funding fee is paid once and can be financed into your loan.

    This fee helps offset the cost of the VA loan program to taxpayers, ensuring the program remains self-sustaining and available for all eligible Veterans and service members. Understanding the VA funding fee is part of knowing your total VA loan costs.

    Can Be Financed

    Roll the fee into your loan—no upfront cash required

    One-Time Payment

    Unlike PMI, you pay it once, not every month

    Many Are Exempt

    Disabled Veterans and survivors pay no funding fee

    VA Funding Fee Rates (Purchase Loans)

    Down PaymentFirst-Time UseSubsequent Use
    0%2.15%3.30%
    5-9%1.50%1.50%
    10%+1.25%1.25%

    Example Calculation

    Scenario: $400,000 loan, first-time use, 0% down
    Funding Fee: $400,000 × 2.15% = $8,600
    Total Loan Amount: $408,600 (if financed)

    Refinance Funding Fee Rates

    Loan TypeFunding Fee
    IRRRL (Streamline)0.50%
    Cash-Out Refinance (First Use)2.15%
    Cash-Out Refinance (Subsequent)3.30%

    Learn more about VA refinance options.

    Who is Exempt from the VA Funding Fee?

    • Veterans receiving VA disability compensation
    • Veterans rated for disability but receiving retirement pay instead
    • Veterans eligible for disability but waived benefits to receive active duty pay
    • Surviving spouses of Veterans who died in service or from service-connected disabilities

    How to Claim Your Exemption

    Provide your VA disability rating documentation to your lender during the loan application. The exemption is automatic once verified. Even a 0% disability rating qualifies.

    Calculate Your VA Funding Fee

    Use our calculator to estimate your funding fee and total loan costs

    FAQs

    Frequently Asked Questions

    Quick Answer

    The VA funding fee is a one-time charge paid to the VA instead of mortgage insurance. For a first-use purchase with no down payment it is 2.15% of the loan amount, and 3.3% for subsequent use. Veterans receiving VA disability compensation, Purple Heart recipients on active duty, and eligible surviving spouses are exempt from the fee entirely.

    For purchase loans: 2.15% first use with less than 5% down, 1.5% with 5-9.99% down, and 1.25% with 10% or more down. Subsequent use is 3.3% with less than 5% down. VA IRRRL streamline refinances are 0.5%.

    Veterans receiving (or entitled to receive) VA compensation for a service-connected disability, active-duty Purple Heart recipients, and surviving spouses receiving Dependency and Indemnity Compensation are exempt. Exemption is confirmed on your Certificate of Eligibility.

    Yes. The fee can be financed into the loan amount so it is not due in cash at closing, or a seller may pay it as part of concessions.

    Yes, if the VA later grants a disability rating with an effective date before your loan closing, you may be entitled to a refund of the funding fee you paid.

    Effectively, yes. The one-time fee funds the VA guaranty program, which is why VA loans never carry monthly PMI, even with zero down.

    Veterans receiving VA compensation for a service-connected disability, veterans rated eligible to receive compensation from a pre-discharge exam, surviving spouses of veterans who died in service or from a service-connected disability, and active-duty Purple Heart recipients are all exempt. Exempt status is confirmed on the Certificate of Eligibility.

    Yes. The funding fee can be paid by the seller as part of the 4% concession allowance, paid in cash by the buyer, or financed into the loan amount. Financing it is the most common choice because it keeps cash to close near zero.

    Often yes. If VA later grants compensation with an effective date before your closing date, you can request a refund of the funding fee you paid. Contact your servicer and the VA regional loan center with the rating decision.
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    Reviewed by Jonathan Mullins, Founder & Mortgage Loan Originator, NMLS #94015Last updated