What Is a VA Funding Fee?

Learn Current Funding Fee Rates, How Much You Might Pay, and More

Most Veterans who buy or refinance a home with a VA loan need to pay a one-time funding fee. This fee helps protect the VA loan program when mortgages default.

How much you pay is based on the type of VA loan, how much money you are borrowing, and other factors. For example, some Veterans who buy their first home with a VA loan may pay a funding fee of 1.5%. If these Veterans are borrowing $200,000 to buy their homes, they will need to pay a funding fee of $3,000 (1.5% of $200,000 = $3,000).

You can pay your funding fee at closing, or you can roll the cost of your fee into your loan and pay it over time. When you finance your funding fee into your loan, you will pay interest on its cost. Some disabled Veterans and surviving spouses are exempt from paying the fee.

VA Loan Funding Fee Chart for Home Purchases

Veterans, active-duty personnel, and members of the National Guard and reserves pay the same funding fee when they buy a house. The rate can vary, depending on the amount of your down payment, whether or not this is the first time you've used your VA loan entitlement to finance a home, or if you've used your entitlement before. Here are the purchase funding fees, as of April 2023:

Chart source: The U.S. Department of Veterans Affairs website.

VA Loan Funding Fee Chart for Streamline Refinances

You can refinance a VA loan with Interest Rate Reduction Refinance Loans (IRRRLs), which are also called VA streamline refinances. These loans let Veterans and active duty personnel refinance with less paperwork and faster closings.

All Veterans and service members pay the same rate, and your funding fee is not affected by your down payment or whether or not you've used your loan entitlement in the past. Here is the streamline refinance funding fee, as of April 2023:

Chart source: The U.S. Department of Veterans Affairs website.

VA Loan Funding Fee Chart for Cash Out Refinances

Cash out refinances let you get cash from your home's equity. You’ll replace your existing mortgage with a new VA loan for a higher amount, then get the difference in cash, at closing. Veterans and service members pay the same rate, although you will pay more if you've used your entitlement for a VA cash out refinance before. Here are the cash out funding fees, as of April 2023:

Chart source: The U.S. Department of Veterans Affairs website.

VA Funding Fee Exemptions for Disabled Veterans and Surviving Spouses

Veterans who are receiving or are eligible to receive compensation for a service-related disability may be exempt from paying the funding fee. The surviving spouses of Veterans who died in service or from a service-related disability may also be exempt from paying the fee. Learn more about who does not have to pay the funding fee on the VA website.

Can You Add the VA Funding Fee to Your Loan Amount?

Yes—in most cases, you can add the cost of your funding fee to your loan amount. This means that you don't need to pay the funding fee in cash, at closing. However, adding the fee to your loan amount is likely to increase your monthly payment, as well as the total amount of money you’ll pay in interest over the life of the loan.

*Freedom Mortgage is a top VA lender in the United States, according to Inside Mortgage Finance, Jan.–Jun., 2024.

Last reviewed and updated October 2024 by Freedom Mortgage.