About the VA funding fee
What is the VA funding fee?
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.
Will I have to pay the VA funding fee?
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.
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You won’t have to pay a VA funding fee if any of these descriptions are true for you:
- You’re receiving VA compensation for a service-connected disability, or
- You’re eligible to receive VA compensation for a service-connected disability, but you’re receiving retirement or active-duty pay instead, or
- You’re receiving Dependency and Indemnity Compensation (DIC) as the surviving spouse of a Veteran, or
- You’re a service member who has received a proposed or memorandum rating before the loan closing date that says you’re eligible to get compensation because of a pre-discharge claim, or
- You’re a service member on active duty who, before or on the loan closing date, provides evidence of having received the Purple Heart
Funding fee refunds
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.
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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.
How will I pay this fee?
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:
- Include the funding fee in your loan and pay it off over time (called financing), or
- Pay the full fee all at once at closing
How much will I pay?
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This depends on the amount of your loan and other factors.
For all loans, we’ll base your VA funding fee on these factors:
- The type of loan you get, and
- The total amount of your loan. We’ll calculate your funding fee as a percentage of your total loan amount.
Depending on your loan type, we may also base your fee on these factors:
- Whether it’s your first time, or a subsequent time, using a VA-backed or VA direct home loan, and
- Your down payment amount
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.
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Category: Finance