VA Loan Funding Fee

The VA funding fee is a one-time fee that most VA loan borrowers pay. It helps keep the VA loan program running without requiring taxpayer funding. The fee is paid to the Department of Veterans Affairs.

Current Funding Fee Rates

For VA-backed purchase and construction loans, the funding fee is calculated as a percentage of your total loan amount (not the purchase price). The rate depends on whether it is your first time using the benefit and your down payment amount.

• First-time use, down payment less than 5% — 2.15% of the loan amount
• First-time use, down payment of 5% or more — 1.5% of the loan amount
• First-time use, down payment of 10% or more — 1.25% of the loan amount
• Subsequent use, down payment less than 5% — 3.3% of the loan amount
• Subsequent use, down payment of 5% or more — 1.5% of the loan amount
• Subsequent use, down payment of 10% or more — 1.25% of the loan amount

Example: On a $190,000 loan with a first-time use and less than 5% down, the funding fee would be $4,085 (2.15% of $190,000). Rates for cash-out refinances, IRRRLs, and manufactured home loans differ — check the official VA rate charts for those.

Who Is Exempt from the Funding Fee

You will not have to pay the VA funding fee if any of these apply to you:

• You are receiving VA compensation for a service-connected disability
• You are eligible to receive VA compensation for a service-connected disability, but you are receiving retirement or active-duty pay instead
• You are a surviving spouse receiving Dependency and Indemnity Compensation (DIC)
• You are a service member who received a proposed or memorandum rating before your loan closing date that qualifies you for compensation
• You are an active-duty member of the Armed Forces who received a Purple Heart (evidence provided on or before the loan closing date)

Funding Fee Refunds

If you paid the funding fee and are later awarded VA compensation for a service-connected disability — with an effective date retroactive to before your loan closing — you may be eligible for a refund of the funding fee. Contact the VA regional loan center at 877-827-3702 to request a refund.

Financing the Funding Fee

If you are not exempt, you can either pay the funding fee in full at closing or finance it into your loan amount — meaning it is added to your loan balance and paid off over the life of the loan. On a purchase loan, the funding fee is the only closing cost that can be financed into the loan; all other fees must be paid at closing.