The VA Funding Fee
What is the VA Funding Fee?
The VA Funding Fee is an insurance fund that the eligible borrower pays in their loan to ensure the prosperity and longevity of the loan program. It is a fee based on type of military service and first or subsequent use. It is charged both on purchase and refinance loans.
How Much is a VA Funding Fee?
The amount of the funding fee depends on:
- The type of transaction (refinance versus purchase)
- The amount of your down payment
- Whether this is the first use or subsequent use of the borrower’s VA loan benefit
- Whether you are/were regular military or Reserve or National Guard
- Veterans and active military buyers receiving compensation for a service-connected disability and deemed more than 10% disabled by the VA are exempt from paying the funding fee.
How Funding Fees Work
If you are VA refinancing you are required to pay a va funding fee, however, the fee can be applied to your loan payments. So if your fee is $30 a month it will be included in your monthly mortgage payments. Veterans that have a cash out refinance generally pay a slightly higher funding fee than the 0.5% fixed rate on the FHA streamline refinance.
VA Funding Fee Chart
You can use these funding fee charts to get an idea of what your funding fees might be depending on your branch of service and whether or not this is your first home loan.
| New Home Funding Fee Rate | ||
| Down Payment | First-Time Use | Subsequent Use |
| 0% | 2.30% | 3.60% |
| 5 – 9.99% | 1.65% | 1.65% |
| 10%+ | 1.40% | 1.40% |
| Refinancing Funding Fee Rate | ||
| Down Payment | First-Time Use | Subsequent Use |
| n/a | 2.15% | 3.30% |
| n/a | 2.40% | 3.30% |
The Amount of the funding fee depends on the following:
- The type of transaction (refinance versus purchase)
- Down payment
- Whether this is the first use or subsequent use of the borrowerʼs VA loan benefit
- Whether you are/were regular military or Reserve or National Guard
- Veterans and active military buyers receiving compensation for a service-connected disability and deemed more than 10% disabled by the VA are exempt from paying the Funding Fee, and new in 2020 active military purple heart recipients and also now exempt from paying the Funding Fee
VA Funding Fee and Disabled Veterans
Veterans and active military buyers receiving compensation for a service-connected disability and deemed more than 10% disabled by the VA are exempt from paying the funding fee. The VA funding fee can vary from 0.5% to 3.3% and having it waived can save you thousands of dollars in closing cost fees. To check if you are exempt, use your eBenefits portal and navigate to the disabilities page.
Talk to one of our loan specialists today about the potential funding fees associated with your loan as well as what your options are to reduce your fees.
