Learn about the VA funding fee and other closing costs you may need to pay on your VA-backed or VA direct home loan.
The VA funding fee is a one-time payment that the Veteran, service member, or survivor pays on a VA-backed or VA direct home loan. This fee helps to lower the cost of the loan for U.S. taxpayers since the VA home loan program doesn’t require down payments or monthly mortgage insurance.
If you’re using a VA home loan to buy, build, improve, or repair a home or to refinance a mortgage, you’ll need to pay the VA funding fee unless you meet certain requirements.
You won’t have to pay a VA funding fee if any of these descriptions are true for you:
You may be eligible for a refund of the VA funding fee if you’re later awarded VA compensation for a service-connected disability. The effective date of your VA compensation must be retroactive to before the date of your loan closing.
If you get a proposed or memorandum rating after your loan closing date, you’ll still need to pay the funding fee. You won’t be eligible for a refund based on this rating.
If you think you’re eligible for a refund, please call your VA regional loan center at 877-827-3702 (TTY: 711). We’re here Monday through Friday, 8:00 a.m. to 6:00 p.m. ET.
You’ll pay this fee when you close your VA-backed or VA direct home loan.
You can pay the VA funding fee in either of these ways:
This depends on the amount of your loan and other factors.
For all loans, we’ll base your VA funding fee on these factors:
Depending on your loan type, we may also base your fee on these factors:
Note: Your lender will also charge interest on the loan in addition to closing fees. Please be sure to talk to your lender about any loan costs that may be added to your loan amount.
Effective April 7, 2023
Review the VA funding fee rate charts on this page to determine the amount you’ll have to pay. Down payment and VA funding fee amounts are expressed as a percentage of total loan amount.
For example: Let’s say you’re using a VA-backed loan for the first time, and you’re buying a $200,000 home and paying a down payment of $10,000 (5% of the $200,000 loan). You’ll pay a VA funding fee of $2,850, or 1.5% of the $190,000 loan amount. The funding fee applies only to the loan amount, not the purchase price of the home.
If your down payment is… Your VA funding fee will be… First use Less than 5% 2.15% 5% or more 1.5% 10% or more 1.25% After first use Less than 5% 3.3% 5% or more 1.5% 10% or more 1.25%
Note: If you used a VA-backed or VA direct home loan to purchase only a manufactured home in the past, you’ll still pay the first-time funding fee.
Note: The VA funding fee rates for refinancing loans don’t change based on your down payment amount. If you used a VA-backed or VA direct home loan to purchase only a manufactured home in the past, you’ll still pay the first-time funding fee.
Note: The VA funding fee rate for this loan doesn’t change based on your down payment amount or whether you’ve used the VA home loan program in the past.
Loan type VA funding fee Interest Rate Reduction Refinancing Loans (IRRRLs) 0.5% Manufactured home loans (not permanently affixed) 1% Loan assumptions 0.5% Vendee loan, for purchasing VA-acquired property 2.25%
Note: The VA funding fee rates for these loans don’t change based on your down payment amount or whether you’ve used the VA home loan program in the past.
We don’t determine most details of your home loan.
Your home loan lender will determine these details of your loan:
These rates may vary from lender to lender. You should know that adding the VA funding fee and other loan costs to your loan could lead to you owing more money than the fair market value of the home. This could reduce the benefit of refinancing since your payment wouldn’t be as low as you may want it to be. It could also make it harder for you to get enough money out of the future sale of the home to pay off your loan balance.
The seller must pay these closing costs (sometimes called seller’s concessions):
You (the buyer) or the seller can negotiate who will pay other closing costs such as these:
Note: We require that a seller can’t pay more than 4% of the total home loan in seller’s concessions. But this rule covers only some closing costs, including the VA funding fee. The rule doesn’t cover loan discount points.