EDUCATION

What is a VA Funding Fee?

Find out about VA Funding Fees and how they affect your VA Home Loan benefit.

VA Funding Fees

The VA funding fee is a one-time fee associated with all VA home loan mortgages. This fee goes straight to the department of Veterans Affairs and is used to offset the costs of the VA home loan program. It allows the VA home loan program to offer mortgages with no down payment and without requiring monthly mortgage insurance.

How much is the funding fee?

The VA funding fee ranges from 0 to 3.3% of your base loan amount. It varies based on the type of loan, the Veteran’s military service, if there is a down payment, and any previous use of the VA home loan program. For instance, active duty military members may have lower funding fee costs than a National Guard member due to their difference in service.

Does everyone have to pay this fee?

This fee can either be financed or paid for in cash, but this fee must be paid at the time of closing. For those who are receiving VA service related disability or Veterans who would be entitled to receive compensation for a service related disability, this fee may be waived. Surviving spouses of Veterans who died from a service connected disability may also be exempt from the fee as well.

Who charges this fee?

The funding fee is one of the closing costs associated with the closing of a VA home loan but isn’t a mortgage company charge. This fee allows the Department of Veteran Affairs to cover losses associated with the VA home loan program and to maintain the program for future military members looking to purchase or refinance homes. For more information, visit the VA’s website here.