What is the Funding Fee?
The VA funding fee is a one-time administrative payment required by federal law. It reduces the cost to taxpayers by helping sustain the program for future generations of service members.
First-Time Use
0% Down2.30%
5% Down1.65%
10% Down1.40%
Subsequent Use
0% Down3.60%
5% Down1.65%
10% Down1.40%
Fee Exemptions
Who is Exempt?
- Veterans receiving VA disability compensation.
- Service members on active duty who have been awarded the Purple Heart.
- Surviving spouses of veterans who died in service or from service-connected disabilities.
- Veterans entitled to receive compensation based on a pre-discharge exam.
Capital Deployment Options
Borrowers have two primary institutional methods for handling the funding fee:
◈ Pay Upfront
Ideal for long-term savings. This method avoids interest accrual on the fee and lowers your total monthly mortgage payment.
◈ Roll Into Loan
Most common strategy. This eliminates out-of-pocket costs at closing, though it slightly increases your monthly debt obligation.