How the VA Funding Fee Works

The VA Funding Fee is paid directly to the Department of Veteran's Affairs so that VA eligibile borrowers can enjoy loan benefits such as Zero down financing and no monthly mortgage insurance payments.

How the Funding Fee is Paid

The funding fee doesn't need to be paid separately and is typically rolled into the loan. This is a benefit to borrowers looking to take advantage of the ZERO down feature of this loan. Borrowers don't need to put anything down, and they can also finance the VA funding fee as well.

Exemption from the Funding Fee

Borrowers that receive any disability payments from the VA or are considered at least 10% disabled they are exempt from paying the funding fee.

Funding Fee Scenarios

The Funding Fee is calculated by looking at 5 different variables: Loan amount, loan type (Purchase or Refinance), type of service, down payment (if any) and prior VA loan use. The examples below show how the VA funding fee varies based on these variables.

1)First Time Users Purchase

0% Down Active Duty/ Retired=2.15% Reserve/Guard = 2.4%

5-10% Down Active Duty/Retired=1.50% Reserve/Guard = 1.75%

10% or Greater Active Duty/Retired=1.25% Reserve/Guard = 1.5%

2)Purchase - Not First Time Using VA

0% Down Active Duty/ Retired =3.30% Reserve/Guard = 3.30%

5-10% Down Active Duty/Retired =1.50% Reserve/Guard = 1.75%

10% or Greater Active Duty/Retired=1.25% Reserve/Guard = 1.5%

3)Refinance - Cashout

1st Time Use Active Duty/ Retired = 2.15% Reserve/Guard= 2.40%

Additional Use Active Duty/Retired =3.30% Reserve/Guard = 3.30%

4)Refinance - Interest Rate Reduction Loan (IRRL)