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VA Funding Fee


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TERMINOLOGY

The VA funding fee is required by law for military members who want a VA (Department of Veterans Affairs) loan. It is 2.15 percent for a no-down-payment loan if you have never had a VA loan. The fee is 3.3 percent for any loans after the first one.

Purchase or Construction Loans

If you have never had a VA loan, the no-down-payment requirement carries a 2.15 percent fee. If you put down up to 10 percent, the fee is 1.5 percent. Anything greater than 10 percent down has a 1.25 percent fee.

If you have already borrowed from the VA, a no-down-payment loan has a 3.3 percent fee. If you put money down, the fees are the same as those a first-time borrower pays.

Reserves or National Guard

If you are in the Reserves or National Guard and have never had a VA loan, the no-down-payment requirement carries a 2.4 percent fee. If you put down up to 10 percent, the fee is 1.75 percent. Anything greater than 10 percent has a 1.5 percent fee.

If you have borrowed before, all fees are the same as on a purchase loan.

Cash-out Refinancing

Regular military members pay a 2.15 percent fee if they have never had a VA loan before. The fee is 3.3 percent for any loans after the first one.

Reserves or National Guard members have a 2.4 percent fee for the first VA loan, and a 3.3 percent fee for any loans after that.

On rate reductions, the fee is .50 percent.

For manufactured homes, the fee is one percent.

Exemptions

Veterans who receive VA compensation for disabilities from service are exempt from fees. Also exempt are veterans who would be eligible to receive compensation for disabilities from service if they did not already get retirement pay.

Spouses of veterans who died in service or who have disabilities that resulted from service are also exempt from fees.