Quick answer
The VA funding fee is a one-time charge, set as a percentage of the loan amount, that most borrowers pay on a VA-backed home loan. The rate depends on the loan type, your down payment and whether you’ve used the benefit before; you can pay it at closing or finance it. VA loans have no monthly mortgage insurance.
Key facts
Funding fee rates
| Loan | First use | After first use |
|---|---|---|
| Purchase, less than 5% down | 2.15% | 3.3% |
| Purchase, 5% to under 10% down | 1.5% | 1.5% |
| Purchase, 10% or more down | 1.25% | 1.25% |
| Cash-out refinance | 2.15% | 3.3% |
| IRRRL | 0.5% | 0.5% |
On a $350,000 purchase with no down payment, the fee is $7,525 the first time and $11,550 on a later use. Putting 10% down cuts it to $3,938.
Who doesn’t pay
You’re exempt if you receive VA compensation for a service-connected disability, or are eligible for it but get retirement or active-duty pay instead; if you’re an eligible surviving spouse receiving Dependency and Indemnity Compensation; or if you’re an active-duty Purple Heart recipient. If a disability rating is later awarded with an effective date before your closing, you may get a refund. See the VA loans guide, VA entitlement and using a VA loan twice.
Sources
- U.S. Department of Veterans Affairs — VA funding fee, first use, less than 5% down; VA funding fee, after first use, less than 5% down; VA funding fee, 10% or more down (Apr 7, 2023)
Last reviewed Figures are checked against the sources above. Read our editorial policy. This page is general information, not financial advice — see the disclaimer.