Funding Fee
The VA home loan is very unique when compared to other zero and low down payment mortgage options in that it does not have any type of mortgage insurance to protect the lender in the event of a default. Instead, the VA loan has what is known as the funding fee. This component of the VA loan allows the Department of Veterans Affairs guarantee the loan to the lender by charging a 2.15% fee to first time users and 3.3% for subsequent use. By doing so, the VA is able to guarantee the lender up to 25% loss in the event of a foreclosure or short sale.

The funding fee can be paid in one of two ways. It can either be paid in cash at closing or it can be added to the total amount financed.

Current VA funding Fee Schedule
Purchase Transactions
Type of Veteran Downpayment % for First Time Use % for Subsequent Use
Regular Military < 5 % 2.15% 3.3%*
5% - 10% 1.50% 1.50%
10% or more 1.25% 1.25%
Reserves/National Guard < 5 % 2.40% 3.3%*
5% - 10% 1.75% 1.75%
10% or more 1.50% 1.50%
Cash Out Refinances
Type of Veteran Downpayment % for First Time Use % for Subsequent Use
Regular Military NA 2.15% 3.3%*
Reserves/National Guard NA 2.4% 3.3%*
Type of Veteran Downpayment % for First Time Use % for Subsequent Use
All Types NA 0.50% 0.50%
  • All VA loans require a VA funding fee. Exceptions may be made to veterans with service-connected disabilities and to surviving spouses of veterans who die in service or from service-connected disabilities. Exceptions are made by VA when we send in for the certificate of eligibility.
  • All or part of the fee may be paid in cash at loan closing or may be included in the loan without regard to the reasonable value of the property or the computed maximum loan amount, as appropriate.
  • *The higher subsequent use fee does not apply to these types of loans if the veteran’s only prior use of entitlement was for a manufactured home loan.
  • **The funding fee for subsequent use on a Refinance includes changes from a conventional/FHA loan into a VA loan.

By comparison with other mortgage options, the VA funding fee is significantly less expensive per month.

Our VA mortgage specialists are ready to answer all of your questions 7 days a week:
Call us directly: 866.387.9148
Text us directly: 619.623.0633

"Proudly Helping Veterans Achieve the American Dream"

Loan approval is not guaranteed and is subject to lender review of information. Loan is only approved when lender has issued approval in writing. Specified rates may not be available for all borrowers. Rate subject to change with market conditions. This licensee is performing acts for which a real estate license is required. C2 Financial is licensed by the California Bureau of Real Estate: Broker # 01821025. NMLS # 135622. California Bureau of Real Estate #01326712, NMLS #84095. Oregon Division of Financial Regulation License #4917 and #84095, Washington Department of Financial Institutions License #MB- 135622 and #MLO-84095, Colorado Department of Regulatory Agencies MLO License #100508568, Florida Office of Financial Regulation License #MBR 487 and #LO47057. *Closing costs are paid with additional yield spread premium which is the revenue paid to a mortgage broker for providing a borrower with a higher interest rate on a mortgage loan in exchange for lower up front costs.
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Christopher Murphy - Loan Consultant
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