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The VA Funding Fee, Explained
Why it exists, what determines the rate, and who's exempt from paying it.
The VA funding fee is a one-time fee that helps keep the VA loan program funded for future generations of veterans, since VA loans don't carry monthly mortgage insurance like conventional or FHA loans do. It can be paid in cash at closing or rolled into your loan amount, which is what most borrowers choose.
What determines your rate
- Down payment: a larger down payment (10%+ or 5%+) lowers the fee
- First use vs. subsequent use: using your VA benefit for the first time generally carries a lower fee than using it again
- Loan type: purchase loans, cash-out refinances, and IRRRLs each have their own fee structure
Who's exempt
- Veterans receiving VA compensation for a service-connected disability
- Veterans who would be entitled to compensation if not for receiving retirement or active-duty pay
- Surviving spouses eligible for a VA loan
Want an exact funding fee quote for your situation?
Every situation is different, and these are general guidelines — the fastest way to know where you stand is a quick conversation. Send us a message or visit our team page to apply directly.