When the VA Loan program was established, Congress set a requirement that Veterans using the program would pay a one-time VA Funding Fee to the Department of Veterans Affairs. This fee is unique to the Veterans Affairs loan program, enabling it to be self-funded and continue to help generations of military members achieve the dream of homeownership.
The Funding Fee essentially provides Veterans Affairs with a safety net to cover costs for the small number of loans that may go into default. It also enables the program to offer Veterans the benefit of a zero-down payment option.
The VA Funding Fee amount is based on your total loan amount and varies due to several factors: type of military service, whether you’ve had a prior VA Loan or if you choose to make a down payment on your loan.
When you use the VA Loan program to get a mortgage or refinance, you will pay a funding fee that is a percentage of your overall loan. Use the VA Funding Fee Calculator below to estimate your fee amount. This does not necessarily mean that you need to pay cash out-of-pocket – it is not the same as a down payment. In fact, most veterans choose to roll the funding fee into their overall mortgage amount.
There are some exceptions to paying the VA Funding Fee, covered below.
It is important to note that nearly 34% of all Veterans are exempt from paying the VA Funding Fee. You may not have to pay the Funding Fee if you are a:
The VA Funding Fee calculator will ask if you are a disabled Veteran, to determine if you are potentially exempt from paying the Funding Fee.
The VA Funding Fee is different for everyone, because it is based on a variety of factors related to your personal financial situation. The VA Funding Fee Calculator will help you understand the fee amount that would apply to your specific purchasing situation.
The fee will vary, depending on your type of service. For example, the fee is slightly higher for Reservists and National Guard members than it is for Regular Military. It also depends on whether you will be making a down payment on the loan and, if so, how much (although, remember, there is no down payment required on a VA Loan!).
If you are Regular Military with zero down payment, then the funding fee will be 2.15% of your first loan. If you take out a subsequent loan, the fee would be 3.3%. For a Reservist or National Guard member also with no down payment, the fee would be a bit higher on the first loan: 2.4% on the first loan and 3.3% on a subsequent loan.
The fee can be reduced if you intend to make a down payment on your loan. For Regular Military, the fee is 1.5% for all types of loans with a down payment of between 5 and 10%. For Reservists and National Guard members who make the same down payment, the fee is 1.75%.
For those able to make a down payment of 10% or more, the fee is further reduced to 1.25% for Regular Military and 1.5% for Reservists and National Guard members. Basically, the more down payment you make, the lower the VA Funding Fee will be. VA refinance options also will require a VA Funding Fee. The VA Streamline loan comes with a lower Funding Fee of 0.5% of your overall loan.
If you are Regular Military getting a first-time VA loan:
If you are Regular Military getting a subsequent loan:
If you are a Reservist or National Guard member getting a first-time VA loan:
If you are a Reservist or National Guard member getting a subsequent loan:
When looking to purchase or refinance a home, Veterans may discover that there are additional state benefits they can access. Each state in the country has different programs available for Veterans. Talking with your realtor or lender may give you a better understanding of options available to you to help reduce costs.
You can choose to roll the VA Funding Fee into your mortgage costs, so it would be part of your overall monthly payment amount. Most Veterans choose to do this instead of paying the VA Funding Fee up front. If you choose to roll the fee into your overall mortgage payment, then you can expect to see an additional amount included with your monthly payment.
After using the VA Funding Fee Calculator, consult one of our licensed refinance specialists to understand all the factors that may affect the calculation and options available for meeting your financial needs.
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