Click here to apply for an instant HELOC!

top-bg

VA Funding Fee Information and Calculations

Veteran Services

bottom-bg

VA loans provide eligible Veterans and military spouses with exclusive advantages to assist them in realizing their dream of homeownership. These benefits include zero down payment requirements, no private mortgage insurance, and typically lower interest rates than the market average, making VA loans one of the most desirable options available. To ensure that this program is available to future generations of Veteran homebuyers, the Department of Veterans Affairs mandates that most borrowers pay the VA funding fee.

What is the VA Funding Fee?

VA loans offer distinctive benefits to qualifying Veterans and military spouses, which include zero down payment requirements, no private mortgage insurance, and generally lower interest rates compared to the market average. As a result, VA loans are a highly sought-after option for those seeking homeownership. To ensure the longevity of this program and continue providing support to future generations of Veteran homebuyers, the Department of Veterans Affairs mandates that most borrowers pay the VA funding fee.

The VA funding fee is a one-time fee paid to the Department of Veterans Affairs, typically at closing. While the majority of Veterans pay a fee of 2.15%, the fee can range from 0.5% to 3.3%, depending on the type of loan, whether the borrower has utilized a VA loan before, and if a down payment greater than 5% has been made. While the VA requires most borrowers to pay this fee, there are exemptions, such as borrowers who receive compensation for service-connected disabilities.

Determining the Funding Fee Amount

The calculation of the VA Funding Fee depends on several factors, including the type of VA loan, whether the borrower has utilized the VA loan benefit before, and whether a down payment has been made. Borrowers with service-connected disabilities and certain others may be exempt from paying the fee entirely. While funding fees for Reservists and National Guard members were historically higher than those for regular military members, fees for all branches are now equal due to the passing of the Blue Water Navy Vietnam Veterans Act.

Verify your VA loan eligibility (April 24, 2023)

a2023.jpg

VA Funding Fee for Purchase Loans

As you'll see in the VA funding fee table for 2023 below, Veterans purchasing with a VA loan for the first time receive a lower fee than subsequent users. Though not required, first-time and subsequent purchasers can decrease the funding fee with a minimum 5% down payment.

The following table shows the current VA funding fee rates on purchase loans for Veterans, active military, Reserves and National Guard members.

2023 VA Funding Fee Chart

Down Payment First-Time VA Loan Use Subsequent VA Loan Use
No Down Payment 2.15% 3.3%
5% or more 1.5% 1.5%
10% or more 1.25% 1.25%

 

 

This communication is for informational purposes only. This is not a commitment to lend. All loans are subject to buyer and property qualification. All programs, rates, and fees are subject to change or cancelation at any time and without notice. Contact Mortgages by Richard to learn more about mortgage products and your eligibility.

What our clients say.

back-to-top