The VA funding fee is a one-time upfront cost — not monthly mortgage insurance. Some veterans don’t pay it at all. Here’s the complete breakdown of amounts, exemptions, and how it works.
What Is the VA Funding Fee?
The VA funding fee is charged on most VA loans to sustain the VA loan guaranty program. Because VA loans require no down payment and no monthly MI, this one-time fee is how the program remains available for future veterans. It is calculated as a percentage of the loan amount and varies based on down payment, first vs. subsequent use, and loan type.
Funding Fee — Purchase Loans
| Down Payment | First-Time Use | Subsequent Use |
|---|---|---|
| Less than 5% | 2.15% | 3.30% |
| 5% to less than 10% | 1.50% | 1.50% |
| 10% or more | 1.25% | 1.25% |
Funding Fee — Refinance Loans
| Loan Type | Fee |
|---|---|
| VA IRRRL (Streamline Refinance) | 0.50% |
| VA Cash-Out Refinance — First Use | 2.15% |
| VA Cash-Out Refinance — Subsequent Use | 3.30% |
Who Is Exempt From the Funding Fee?
- Veterans receiving VA compensation for a service-connected disability
- Veterans entitled to receive VA compensation but who receive retirement or active-duty pay instead
- Unremarried surviving spouses of veterans who died in service or from a service-connected disability
- Active-duty members with a proposed or memorandum VA disability rating prior to closing
- Active-duty members awarded the Purple Heart on or before the closing date
Your Certificate of Eligibility (COE) will indicate whether you are exempt. If you have a pending disability claim, verify your status early in the process.
Can the Funding Fee Be Financed?
Yes. The fee can be rolled into the loan amount, paid out of pocket, covered by the seller, or paid via lender credits. Most veterans choose to finance it to avoid additional cash at closing.
Questions About the Funding Fee?
Many veterans don’t realize they qualify for a full exemption. At Lendia, we check your COE status from the very start. Get a free quote and we’ll confirm your status today.