As one of the few remaining true “no down payment” loan programs available in the United States today, the VA Loan program represents a portion of the cost of providing this benefit to Veterans. It is essentially a form of insurance for the Department of Veterans Affairs, as the proceeds go directly to VA (not your lender or loan originator) to help cover losses on VA Home Loans that go in to default.
The good news is the funding fee can be, and usually is, included in the Veteran borrowers loan amount, and the incremental payment is fairly minimal when compared to the costs of mortgage insurance when putting less than 20% down or utilizing a FHA Loan program.
Also, Veterans with a 10% or greater VA disability rating are exempt from the funding fee, as are eligible spouses of Veterans who died as the result of service or service-connected injuries.
How much is the VA Funding Fee
The amount of the funding fee will be dependent on several factors including down payment (if any), whether it is a first or subsequent use of VA benefits, type of Military service, or of it’s a streamline refinance. Sound confusing? – Review the charts below to help determine what your VA Funding Fee will be. You can also fill out the short form to the right and a Veteran Loan Specialist can assist you with pre-qualification and help with all the details.
Active Duty, Separated & Retired Military
|Down Payment||First Use||Subsequent use|
|Less than 5%||2.15 percent||3.3 percent|
|5-10 percent||1.5 percent||1.5 percent|
|10 percent and up||1.25 percent||1.25 percent|
Reserves and National Guard
|Down Payment||First Use||Subsequent Use|
|Less than 5%||2.4 percent||3.3 percent|
|5 to10 percent||1.75 percent||1.75 percent|
|10 percent and up||1.5 percent||1.5 percent|
VA Streamline Refinance (IRRRL)
The VA Funding Fee for VA Streamline Refinance loans is the same 0.5% for all personnel on every use of the IRRRL (Interest Rate Reduction Refinance Loan) program.