The lender confirms exemption status on your Certificate of Eligibility, which we request for you. If your disability claim is decided after closing with an effective date before it, you can apply to the VA for a refund of the fee you paid.
How it is paid
Almost nobody pays the funding fee in cash. It can be financed into the loan, on top of the purchase price, which is why a $350,000 nothing-down VA purchase closes as a $357,525 loan. Financing it raises the monthly payment by a small amount but keeps your cash for closing costs and moving. The seller can also pay the fee for you as a concession, within the VA’s rule that seller concessions may not exceed 4 percent of the loan amount, and that is often the first thing we ask for when a seller is willing to help with costs.
Is the fee worth it?
Compare it with what it replaces. A conventional buyer with 5 percent down pays private mortgage insurance every month until the balance reaches 80 percent of the original value, commonly $100 to $200 a month for years; an FHA buyer pays 1.75 percent upfront and an annual premium that, with less than 10 percent down, lasts the life of the loan. The VA fee is paid once, can be financed, is waived for the veterans the exemptions cover, and there is no monthly insurance afterwards. For most eligible veterans it is the less expensive of the three, and for an exempt veteran it costs nothing at all.
Read more on our VA home loans page or see how the benefit works in Michigan on VA home loans in Michigan. If you want your Certificate of Eligibility pulled and the fee or exemption confirmed for your situation, get a quote and a licensed pro will do it with you.
Funding fee rates are those in 38 U.S.C. 3729 as of October 2026. Figures are examples for illustration, not an offer of credit. MortgagePros, LLC, NMLS 1925352, is licensed in 39 states and is not affiliated with, endorsed by, or acting on behalf of the Department of Veterans Affairs or any government agency.
The lender confirms exemption status on your Certificate of Eligibility, which we request for you. If your disability claim is decided after closing with an effective date before it, you can apply to the VA for a refund of the fee you paid.
How it is paid
Almost nobody pays the funding fee in cash. It can be financed into the loan, on top of the purchase price, which is why a $350,000 nothing-down VA purchase closes as a $357,525 loan. Financing it raises the monthly payment by a small amount but keeps your cash for closing costs and moving. The seller can also pay the fee for you as a concession, within the VA’s rule that seller concessions may not exceed 4 percent of the loan amount, and that is often the first thing we ask for when a seller is willing to help with costs.
Is the fee worth it?
Compare it with what it replaces. A conventional buyer with 5 percent down pays private mortgage insurance every month until the balance reaches 80 percent of the original value, commonly $100 to $200 a month for years; an FHA buyer pays 1.75 percent upfront and an annual premium that, with less than 10 percent down, lasts the life of the loan. The VA fee is paid once, can be financed, is waived for the veterans the exemptions cover, and there is no monthly insurance afterwards. For most eligible veterans it is the less expensive of the three, and for an exempt veteran it costs nothing at all.
Read more on our VA home loans page or see how the benefit works in Michigan on VA home loans in Michigan. If you want your Certificate of Eligibility pulled and the fee or exemption confirmed for your situation, get a quote and a licensed pro will do it with you.
Funding fee rates are those in 38 U.S.C. 3729 as of October 2026. Figures are examples for illustration, not an offer of credit. MortgagePros, LLC, NMLS 1925352, is licensed in 39 states and is not affiliated with, endorsed by, or acting on behalf of the Department of Veterans Affairs or any government agency.
The lender confirms exemption status on your Certificate of Eligibility, which we request for you. If your disability claim is decided after closing with an effective date before it, you can apply to the VA for a refund of the fee you paid.
How it is paid
Almost nobody pays the funding fee in cash. It can be financed into the loan, on top of the purchase price, which is why a $350,000 nothing-down VA purchase closes as a $357,525 loan. Financing it raises the monthly payment by a small amount but keeps your cash for closing costs and moving. The seller can also pay the fee for you as a concession, within the VA’s rule that seller concessions may not exceed 4 percent of the loan amount, and that is often the first thing we ask for when a seller is willing to help with costs.
Is the fee worth it?
Compare it with what it replaces. A conventional buyer with 5 percent down pays private mortgage insurance every month until the balance reaches 80 percent of the original value, commonly $100 to $200 a month for years; an FHA buyer pays 1.75 percent upfront and an annual premium that, with less than 10 percent down, lasts the life of the loan. The VA fee is paid once, can be financed, is waived for the veterans the exemptions cover, and there is no monthly insurance afterwards. For most eligible veterans it is the less expensive of the three, and for an exempt veteran it costs nothing at all.
Read more on our VA home loans page or see how the benefit works in Michigan on VA home loans in Michigan. If you want your Certificate of Eligibility pulled and the fee or exemption confirmed for your situation, get a quote and a licensed pro will do it with you.
Funding fee rates are those in 38 U.S.C. 3729 as of October 2026. Figures are examples for illustration, not an offer of credit. MortgagePros, LLC, NMLS 1925352, is licensed in 39 states and is not affiliated with, endorsed by, or acting on behalf of the Department of Veterans Affairs or any government agency.
The lender confirms exemption status on your Certificate of Eligibility, which we request for you. If your disability claim is decided after closing with an effective date before it, you can apply to the VA for a refund of the fee you paid.
How it is paid
Almost nobody pays the funding fee in cash. It can be financed into the loan, on top of the purchase price, which is why a $350,000 nothing-down VA purchase closes as a $357,525 loan. Financing it raises the monthly payment by a small amount but keeps your cash for closing costs and moving. The seller can also pay the fee for you as a concession, within the VA’s rule that seller concessions may not exceed 4 percent of the loan amount, and that is often the first thing we ask for when a seller is willing to help with costs.
Is the fee worth it?
Compare it with what it replaces. A conventional buyer with 5 percent down pays private mortgage insurance every month until the balance reaches 80 percent of the original value, commonly $100 to $200 a month for years; an FHA buyer pays 1.75 percent upfront and an annual premium that, with less than 10 percent down, lasts the life of the loan. The VA fee is paid once, can be financed, is waived for the veterans the exemptions cover, and there is no monthly insurance afterwards. For most eligible veterans it is the less expensive of the three, and for an exempt veteran it costs nothing at all.
Read more on our VA home loans page or see how the benefit works in Michigan on VA home loans in Michigan. If you want your Certificate of Eligibility pulled and the fee or exemption confirmed for your situation, get a quote and a licensed pro will do it with you.
Funding fee rates are those in 38 U.S.C. 3729 as of October 2026. Figures are examples for illustration, not an offer of credit. MortgagePros, LLC, NMLS 1925352, is licensed in 39 states and is not affiliated with, endorsed by, or acting on behalf of the Department of Veterans Affairs or any government agency.
The lender confirms exemption status on your Certificate of Eligibility, which we request for you. If your disability claim is decided after closing with an effective date before it, you can apply to the VA for a refund of the fee you paid.
How it is paid
Almost nobody pays the funding fee in cash. It can be financed into the loan, on top of the purchase price, which is why a $350,000 nothing-down VA purchase closes as a $357,525 loan. Financing it raises the monthly payment by a small amount but keeps your cash for closing costs and moving. The seller can also pay the fee for you as a concession, within the VA’s rule that seller concessions may not exceed 4 percent of the loan amount, and that is often the first thing we ask for when a seller is willing to help with costs.
Is the fee worth it?
Compare it with what it replaces. A conventional buyer with 5 percent down pays private mortgage insurance every month until the balance reaches 80 percent of the original value, commonly $100 to $200 a month for years; an FHA buyer pays 1.75 percent upfront and an annual premium that, with less than 10 percent down, lasts the life of the loan. The VA fee is paid once, can be financed, is waived for the veterans the exemptions cover, and there is no monthly insurance afterwards. For most eligible veterans it is the less expensive of the three, and for an exempt veteran it costs nothing at all.
Read more on our VA home loans page or see how the benefit works in Michigan on VA home loans in Michigan. If you want your Certificate of Eligibility pulled and the fee or exemption confirmed for your situation, get a quote and a licensed pro will do it with you.
Funding fee rates are those in 38 U.S.C. 3729 as of October 2026. Figures are examples for illustration, not an offer of credit. MortgagePros, LLC, NMLS 1925352, is licensed in 39 states and is not affiliated with, endorsed by, or acting on behalf of the Department of Veterans Affairs or any government agency.
The lender confirms exemption status on your Certificate of Eligibility, which we request for you. If your disability claim is decided after closing with an effective date before it, you can apply to the VA for a refund of the fee you paid.
How it is paid
Almost nobody pays the funding fee in cash. It can be financed into the loan, on top of the purchase price, which is why a $350,000 nothing-down VA purchase closes as a $357,525 loan. Financing it raises the monthly payment by a small amount but keeps your cash for closing costs and moving. The seller can also pay the fee for you as a concession, within the VA’s rule that seller concessions may not exceed 4 percent of the loan amount, and that is often the first thing we ask for when a seller is willing to help with costs.
Is the fee worth it?
Compare it with what it replaces. A conventional buyer with 5 percent down pays private mortgage insurance every month until the balance reaches 80 percent of the original value, commonly $100 to $200 a month for years; an FHA buyer pays 1.75 percent upfront and an annual premium that, with less than 10 percent down, lasts the life of the loan. The VA fee is paid once, can be financed, is waived for the veterans the exemptions cover, and there is no monthly insurance afterwards. For most eligible veterans it is the less expensive of the three, and for an exempt veteran it costs nothing at all.
Read more on our VA home loans page or see how the benefit works in Michigan on VA home loans in Michigan. If you want your Certificate of Eligibility pulled and the fee or exemption confirmed for your situation, get a quote and a licensed pro will do it with you.
Funding fee rates are those in 38 U.S.C. 3729 as of October 2026. Figures are examples for illustration, not an offer of credit. MortgagePros, LLC, NMLS 1925352, is licensed in 39 states and is not affiliated with, endorsed by, or acting on behalf of the Department of Veterans Affairs or any government agency.
The lender confirms exemption status on your Certificate of Eligibility, which we request for you. If your disability claim is decided after closing with an effective date before it, you can apply to the VA for a refund of the fee you paid.
How it is paid
Almost nobody pays the funding fee in cash. It can be financed into the loan, on top of the purchase price, which is why a $350,000 nothing-down VA purchase closes as a $357,525 loan. Financing it raises the monthly payment by a small amount but keeps your cash for closing costs and moving. The seller can also pay the fee for you as a concession, within the VA’s rule that seller concessions may not exceed 4 percent of the loan amount, and that is often the first thing we ask for when a seller is willing to help with costs.
Is the fee worth it?
Compare it with what it replaces. A conventional buyer with 5 percent down pays private mortgage insurance every month until the balance reaches 80 percent of the original value, commonly $100 to $200 a month for years; an FHA buyer pays 1.75 percent upfront and an annual premium that, with less than 10 percent down, lasts the life of the loan. The VA fee is paid once, can be financed, is waived for the veterans the exemptions cover, and there is no monthly insurance afterwards. For most eligible veterans it is the less expensive of the three, and for an exempt veteran it costs nothing at all.
Read more on our VA home loans page or see how the benefit works in Michigan on VA home loans in Michigan. If you want your Certificate of Eligibility pulled and the fee or exemption confirmed for your situation, get a quote and a licensed pro will do it with you.
Funding fee rates are those in 38 U.S.C. 3729 as of October 2026. Figures are examples for illustration, not an offer of credit. MortgagePros, LLC, NMLS 1925352, is licensed in 39 states and is not affiliated with, endorsed by, or acting on behalf of the Department of Veterans Affairs or any government agency.
- A veteran receiving VA compensation for a service-connected disability.
- A veteran who would be entitled to receive that compensation but is receiving retirement or active-duty pay instead.
- A service member with a proposed or memorandum rating, issued before the loan closes, that says you are entitled to compensation for a pre-discharge claim.
- An active-duty service member who has received the Purple Heart.
- A surviving spouse of a veteran who died in service or from a service-connected disability, or who was totally disabled, and who is receiving Dependency and Indemnity Compensation.
The lender confirms exemption status on your Certificate of Eligibility, which we request for you. If your disability claim is decided after closing with an effective date before it, you can apply to the VA for a refund of the fee you paid.
How it is paid
Almost nobody pays the funding fee in cash. It can be financed into the loan, on top of the purchase price, which is why a $350,000 nothing-down VA purchase closes as a $357,525 loan. Financing it raises the monthly payment by a small amount but keeps your cash for closing costs and moving. The seller can also pay the fee for you as a concession, within the VA’s rule that seller concessions may not exceed 4 percent of the loan amount, and that is often the first thing we ask for when a seller is willing to help with costs.
Is the fee worth it?
Compare it with what it replaces. A conventional buyer with 5 percent down pays private mortgage insurance every month until the balance reaches 80 percent of the original value, commonly $100 to $200 a month for years; an FHA buyer pays 1.75 percent upfront and an annual premium that, with less than 10 percent down, lasts the life of the loan. The VA fee is paid once, can be financed, is waived for the veterans the exemptions cover, and there is no monthly insurance afterwards. For most eligible veterans it is the less expensive of the three, and for an exempt veteran it costs nothing at all.
Read more on our VA home loans page or see how the benefit works in Michigan on VA home loans in Michigan. If you want your Certificate of Eligibility pulled and the fee or exemption confirmed for your situation, get a quote and a licensed pro will do it with you.
Funding fee rates are those in 38 U.S.C. 3729 as of October 2026. Figures are examples for illustration, not an offer of credit. MortgagePros, LLC, NMLS 1925352, is licensed in 39 states and is not affiliated with, endorsed by, or acting on behalf of the Department of Veterans Affairs or any government agency.
- A veteran receiving VA compensation for a service-connected disability.
- A veteran who would be entitled to receive that compensation but is receiving retirement or active-duty pay instead.
- A service member with a proposed or memorandum rating, issued before the loan closes, that says you are entitled to compensation for a pre-discharge claim.
- An active-duty service member who has received the Purple Heart.
- A surviving spouse of a veteran who died in service or from a service-connected disability, or who was totally disabled, and who is receiving Dependency and Indemnity Compensation.
The lender confirms exemption status on your Certificate of Eligibility, which we request for you. If your disability claim is decided after closing with an effective date before it, you can apply to the VA for a refund of the fee you paid.
How it is paid
Almost nobody pays the funding fee in cash. It can be financed into the loan, on top of the purchase price, which is why a $350,000 nothing-down VA purchase closes as a $357,525 loan. Financing it raises the monthly payment by a small amount but keeps your cash for closing costs and moving. The seller can also pay the fee for you as a concession, within the VA’s rule that seller concessions may not exceed 4 percent of the loan amount, and that is often the first thing we ask for when a seller is willing to help with costs.
Is the fee worth it?
Compare it with what it replaces. A conventional buyer with 5 percent down pays private mortgage insurance every month until the balance reaches 80 percent of the original value, commonly $100 to $200 a month for years; an FHA buyer pays 1.75 percent upfront and an annual premium that, with less than 10 percent down, lasts the life of the loan. The VA fee is paid once, can be financed, is waived for the veterans the exemptions cover, and there is no monthly insurance afterwards. For most eligible veterans it is the less expensive of the three, and for an exempt veteran it costs nothing at all.
Read more on our VA home loans page or see how the benefit works in Michigan on VA home loans in Michigan. If you want your Certificate of Eligibility pulled and the fee or exemption confirmed for your situation, get a quote and a licensed pro will do it with you.
Funding fee rates are those in 38 U.S.C. 3729 as of October 2026. Figures are examples for illustration, not an offer of credit. MortgagePros, LLC, NMLS 1925352, is licensed in 39 states and is not affiliated with, endorsed by, or acting on behalf of the Department of Veterans Affairs or any government agency.
The VA funding fee is the one real cost of a VA loan that conventional and FHA borrowers do not pay, and it confuses more veterans than any other part of the benefit. Here is what it is, exactly how much it is in every situation, who does not have to pay it, and how to handle it at closing.
What the fee is for
A VA loan has no down payment requirement and no monthly mortgage insurance. The funding fee is the one-time charge, set by federal law and paid to the Department of Veterans Affairs, that keeps the program funded for the next veteran. It is a percentage of the loan amount, charged once at closing, and it is the only VA-specific cost on the loan. The VA does not lend you the money; a private lender does, and the VA guarantees part of it.
How much it is
The fee depends on what the loan is for, how much you put down, and whether you have used the benefit before. These are the rates set in federal law and in effect through November 14, 2031.
| Loan | First use | Subsequent use |
|---|---|---|
| Purchase or construction, less than 5 percent down | 2.15% | 3.30% |
| Purchase or construction, 5 to 9.99 percent down | 1.50% | 1.50% |
| Purchase or construction, 10 percent or more down | 1.25% | 1.25% |
| Cash-out refinance | 2.15% | 3.30% |
| Interest Rate Reduction Refinance Loan (IRRRL) | 0.50% | 0.50% |
| Loan assumption | 0.50% | 0.50% |
Two things people miss. First, the headline 2.15 percent applies only to a first-use purchase with less than 5 percent down; put 5 percent down and it drops to 1.5 percent, and that lower figure applies whether or not you have used the benefit before. Second, “subsequent use” means a second or later VA loan, so a veteran buying with VA for the second time with nothing down pays 3.3 percent, not 2.15.
On a $350,000 first-use purchase with nothing down, the fee is $7,525. On a $350,000 IRRRL it is $1,750.
Who is exempt
The exemption is about compensation, not a rating threshold on its own. You do not pay the funding fee if you are:
- A veteran receiving VA compensation for a service-connected disability.
- A veteran who would be entitled to receive that compensation but is receiving retirement or active-duty pay instead.
- A service member with a proposed or memorandum rating, issued before the loan closes, that says you are entitled to compensation for a pre-discharge claim.
- An active-duty service member who has received the Purple Heart.
- A surviving spouse of a veteran who died in service or from a service-connected disability, or who was totally disabled, and who is receiving Dependency and Indemnity Compensation.
The lender confirms exemption status on your Certificate of Eligibility, which we request for you. If your disability claim is decided after closing with an effective date before it, you can apply to the VA for a refund of the fee you paid.
How it is paid
Almost nobody pays the funding fee in cash. It can be financed into the loan, on top of the purchase price, which is why a $350,000 nothing-down VA purchase closes as a $357,525 loan. Financing it raises the monthly payment by a small amount but keeps your cash for closing costs and moving. The seller can also pay the fee for you as a concession, within the VA’s rule that seller concessions may not exceed 4 percent of the loan amount, and that is often the first thing we ask for when a seller is willing to help with costs.
Is the fee worth it?
Compare it with what it replaces. A conventional buyer with 5 percent down pays private mortgage insurance every month until the balance reaches 80 percent of the original value, commonly $100 to $200 a month for years; an FHA buyer pays 1.75 percent upfront and an annual premium that, with less than 10 percent down, lasts the life of the loan. The VA fee is paid once, can be financed, is waived for the veterans the exemptions cover, and there is no monthly insurance afterwards. For most eligible veterans it is the less expensive of the three, and for an exempt veteran it costs nothing at all.
Read more on our VA home loans page or see how the benefit works in Michigan on VA home loans in Michigan. If you want your Certificate of Eligibility pulled and the fee or exemption confirmed for your situation, get a quote and a licensed pro will do it with you.
Funding fee rates are those in 38 U.S.C. 3729 as of October 2026. Figures are examples for illustration, not an offer of credit. MortgagePros, LLC, NMLS 1925352, is licensed in 39 states and is not affiliated with, endorsed by, or acting on behalf of the Department of Veterans Affairs or any government agency.