What the fee is
The VA funding fee is a one-time charge that helps sustain the VA loan program for future eligible borrowers. It is set as a percentage of the loan amount and varies based on the borrower's situation.
What affects the amount
Common factors include whether the borrower is using a VA loan for the first time or a subsequent time, and the size of the down payment. A larger down payment can reduce the funding fee percentage.
Some borrowers — such as certain veterans receiving service-connected disability compensation — may be exempt from the funding fee. Eligibility for an exemption is determined by the VA.
Paying the fee
The fee can usually be paid at closing or financed into the loan. Financing it spreads the cost over the loan term but increases the principal and the total interest paid.
- The funding fee is a one-time charge supporting the VA program.
- It varies by usage history and down payment.
- Some borrowers are exempt — exemption is determined by the VA.
- Financing the fee adds it to the loan balance and total interest.
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