{"id":329541,"date":"2024-11-11T03:58:12","date_gmt":"2024-11-11T08:58:12","guid":{"rendered":"https:\/\/www.houzeo.com\/blog\/?p=329541"},"modified":"2025-02-11T06:11:33","modified_gmt":"2025-02-11T11:11:33","slug":"va-funding-fee","status":"publish","type":"post","link":"https:\/\/www.houzeo.com\/blog\/va-funding-fee\/","title":{"rendered":"What Is a VA Funding Fee and Why Do You Pay It?"},"content":{"rendered":"\n

As of 2024, the VA home loan program has helped 28 million<\/a> veterans secure homeownership by offering generous mortgage terms. In the past year alone, the program contributed to more than 400,000 loan approvals exemplifying it’s relevance for the veterans. The VA funding fee helps sustain this program. <\/p>\n\n\n\n

The Department of Veterans Affairs (VA) has initiated mortgage programs to help veterans, servicemen, and their surviving spouses. For veterans searching for a new home, you will have to pay a VA funding fee. Depending on the size of your down payment, the VA fund charge will differ.<\/p>\n\n\n\n

As a veteran, understanding the fees involved in the mortgage<\/a> process is important. A VA loan<\/a> pre-approval is an essential tool to help you navigate this process. <\/p>\n\n\n\n

What Is a VA Funding Fee? <\/strong><\/h2>\n\n\n\n

The Department of Veterans Affairs (VA) charges a single payment fee at the closing of a VA loan. This fee helps to cover the operating costs linked with the VA home loan program. It ensures that you as a borrower can enjoy the benefits including no down payment<\/a> options and lower interest rates.<\/p>\n\n\n\n

Why Do You Pay the VA Funding Fee?<\/strong><\/h2>\n\n\n\n

The fee acts as insurance to mitigate any monetary risk to its program. This ensures that the VA can continue to offer benefits to future applicants even if you default on your loan. <\/p>\n\n\n\n

The benefits include flexible repayment options and refinancing an existing mortgage. Ultimately, the funding fee reduces the financial burden on taxpayers.<\/p>\n\n\n\n

How Much Is the VA Funding Fee?<\/strong><\/h2>\n\n\n\n

Your funding fee depends on your down payment and the type of loan<\/a> you opt for. These are the current VA funding fee charts: <\/p>\n\n\n\n

Purchasing and Construction Loans<\/strong>:<\/h3>\n\n\n\n
If Your Down Payment Is:<\/strong><\/td>VA Funding Fee for Veteran’s First Mortgage<\/strong> Will Be:<\/strong><\/td>VA Funding Fee for Second-time Use<\/strong> Will Be:<\/strong><\/td><\/tr>
Less than 5%<\/td>2.15%<\/td>3.3%<\/td><\/tr>
5% – 9.99%<\/td>1.5%<\/td>1.5%<\/td><\/tr>
More than 10%<\/td>1.25%<\/td>1.25%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Cash-Out Refinances<\/strong>:<\/h3>\n\n\n\n
VA Funding Fee<\/strong>:<\/td>Rate<\/strong><\/td><\/tr>
For First-Time Use<\/strong><\/td>2.15%<\/td><\/tr>
For Second-Time Use <\/strong><\/td>3.3%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Different VA Home Loans<\/strong>:<\/h3>\n\n\n\n
Loans<\/strong><\/td>VA Funding Fee<\/strong> Charged At:<\/strong><\/td><\/tr>
Interest Rate Reduction Refinancing Loans (IRRLS)<\/strong><\/td>0.5%<\/td><\/tr>
Manufactured home loans (Not permanently affixed)<\/strong> <\/td>1%<\/td><\/tr>
Loan assumptions <\/strong><\/td>0.5%<\/td><\/tr>
Vendee loan for purchasing VA-acquired property<\/strong> <\/td>2.25%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Note<\/strong>: The fee applies even if you previously used a VA loan for a manufactured home<\/a>.  <\/p>\n\n\n\n

How Can You Pay the Fee?<\/strong><\/h2>\n\n\n\n

To pay the funding fee you can either: <\/p>\n\n\n\n