Most VA loans carry a one-time funding fee. It depends on the loan type, your down payment and whether you have used the benefit before.
How it works
Funding fee = loan amount × the VA rate for your loan
For purchases on first use the rate is 2.15% with less than 5% down, 1.5% with 5% or more, and 1.25% with 10% or more; after first use it is 3.3%, 1.5% and 1.25%. Cash-out refinances are 2.15% on first use and 3.3% after. IRRRLs are 0.5%.
Keep in mind
- You do not pay the fee if you receive VA compensation for a service-connected disability (or are eligible for it but receive retirement or active-duty pay instead), receive Dependency and Indemnity Compensation as a surviving spouse, have a qualifying pre-discharge rating, or are on active duty and have received a Purple Heart.
- The fee can be paid at closing or financed into the loan. Rates from va.gov, effective April 7, 2023.
Questions
How much is the VA funding fee?
For a first-use purchase, 2.15% of the loan with less than 5% down, 1.5% with 5% or more and 1.25% with 10% or more. The fee is a percentage of the loan amount, not the price. See also: VA loan affordability calculator.
Who does not have to pay the VA funding fee?
Veterans receiving compensation for a service-connected disability, surviving spouses receiving Dependency and Indemnity Compensation, and active-duty Purple Heart recipients, among others listed by VA.
