Estimate for your VA Funding Fee

Are you exempt from the VA funding fee?

What is the VA funding fee?

Milatary veteran with familyThe VA funding fee is a one-time fee for all VA-backed home loans. The funding fee helps to cover the costs of the VA mortgage program. This program provides assistance to Veterans when they purchase or refinance a home.

The VA funding fee is a certain percentage of the loan amount. The percentage of the funding fee depends on the veteran's service record and whether or not they are making a down payment.

Some Veterans are exempt from paying the VA funding. Fee. These exemptions include disabled Veterans, Veterans receiving VA pension benefits, and surviving spouses of Veterans who died in service or due to a service-connected disability.

The VA funding fee can be paid upfront or rolled into the loan amount. If you choose to finance the cost, it will increase your monthly

 mortgage payment.

How Much is a VA Funding Fee?

The VA funding fee varies depending on the loan amount, whether it's your first VA loan or you're exempt. You won't have to pay if you're exempt from the funding fee.

VA Funding Fee Chart

VA funding fee chart

VA Funding Fee Exemption

If you are a veteran eligible for a VA loan, ask your lender about the funding fee exemption, and it could save you hundreds of dollars on your loan amount.

Borrowers who are exempt from the VA funding fee

If you are a veteran who is eligible for a VA loan, be sure to ask about the funding fee exemption. It could save you hundreds of dollars on your loan amount.

VA Funding Fee RefundHouse with a sale sign

What if, when you go through the process of obtaining a loan and buying a home, you learn that your disability claim was accepted after you've already closed and paid the financing fee? While this is annoying, the good news is that you may be entitled to a refund of the fee if you are later determined to be eligible for an exemption.

To be eligible for compensation, you must have been entitled to it before the date of the closure. If the compensation takes effect after the sale of your home is complete, you may be disqualified for a refund.

Please get in touch with your lender or call the VA Regional Loan Center at (877) 827-3702 if you feel you are entitled to a refund.

VA Funding Fee for Subsequent Use

If you are a veteran using your VA home loan benefits for the second time, you will be required to pay a higher funding fee than first-time borrowers. The VA funding fee for subsequent use is 3.6% of the loan amount, with a down payment of less than 5%. You can choose to roll this fee into your loan or pay it in cash at closing.

VA Funding Fee on a Irrrl

VA loan graphicThe VA offers two refinance programs: The VA Cash-Out refinance and the Interest Rate Reduction Refinance Loan (IRRRL). Homeowners can take advantage of a lower interest rate through the IRRRL, a mortgage refinancing option that allows them to refinance their current mortgage without undergoing a full credit check or providing income documentation.

This refinance program is also known as a VA streamline refinance. To be eligible for an IRRRL, the homeowner must currently have an existing VA mortgage and the new mortgage must have a lower interest rate than the old one. The VA charges a funding fee of .5% for the Interest Rate Reduction Refinance Loan.

VA Funding Fee on a Cash-Out Refinance

The cash-out refinance program allows for additional cash back at closing or can include the customary closing costs and the payoff of the existing loan amount.

Funding fee percentage for VA cash out refinance

How is the VA Funding Fee Calculated?

Here's how to figure out how much the VA funding fee will cost you::

Loan amount – $200,000
Funding fee percentage X 2.3% = $4,600
Add the funding fee to the loan amount – $204,600
Final mortgage amount = $204,600

Can the VA Funding Fee Be Paid by Seller?

If you're a veteran looking to purchase a home using a VA loan, you might wonder if the seller can pay the VA funding fee. The answer is yes, in some cases.

However, in some cases, the seller may agree to pay the VA funding fee, which can be negotiated as part of the sales contract.

There are also some cases where the VA funding fee can be exempted. If you are disabled or were wounded in combat, you may not have to pay the funding fee. You can also get an exemption if you are a surviving veteran's spouse who died in service or from a service-related disability.
If you have any questions about the VA funding fee or whether you are exempt, be sure to ask your lender. They will be able to give you the most accurate information based on your situation.

Can the VA Funding Fee Be Rolled Into the Loan?

As a veteran, you may want to include the VA funding fee in your loan amount when taking out a VA loan. In most cases, this is possible and will be added to the loan balance, resulting in you paying interest on it over the life of the loan. Some veterans may be exempt from the fee if they are receiving disability benefits from the VA. To find out if this is an option for you, consult with your lender about the VA funding fee and see if it can be rolled into the loan.

Can I Deduct the VA Funding Fee on My Taxes?

The VA funding fee may be deductible, provided you itemize your tax deduction. Speak to a tax advisor.

Rotating question markFAQs About How to Calculate the VA Funding Fee

Q. Do you pay PMI on a VA loan?
A. No, you do not pay PMI on a VA loan.

Q. Is the VA funding fee considered points?
A. No, the VA funding fee is not considered points. The VA funding fee is a fee charged by the VA to fund the VA home loan program.

Q. Is the VA funding fee a closing cost?
A. The VA funding fee is a closing cost, but it's a one-time fee you pay when you get your mortgage. The fee amount varies based on several factors, including your military service history and the size of your down payment (if required).

Q. What are the disadvantages of a VA loan?
A. The VA loan has a funding fee unless the veteran qualifies for an exemption. In most cases, investment properties and second homes are not permitted.

Q. What credit score is needed for a VA loan?
A. The VA doesn't set a minimum credit score, but most lenders require a score of at least 620.


In conclusion, the VA funding fee is a necessary evil that all Veterans must pay to obtain their VA home loan benefits. However, the amount of the cost can be reduced or waived altogether if specific eligibility requirements are met. So be sure to explore your options and take advantage of any available discounts. Thanks for reading!

SOURCE:  Calculate the VA Funding Fee 

Recommended Reading
 Buy a House With a VA Loan: Get More Info 
 VA Mortgage Refinancing Cash Out: Get a cash out now 

 VA Streamline Refinancing: Everything You Need to Know