The VA loan funding fee is a one-time cost charged by the Department of Veterans Affairs (VA) on most VA-backed home loans.
It's designed to help cover the cost of the VA loan program and keep it running for future veterans without needing taxpayer dollars.
You can pay it upfront at closing or roll it into your loan. Either way, it’s a cost every borrower should understand before applying for a VA mortgage.
Verify Your VA Loan Eligibility
The exact amount depends on your:
Loan type (purchase, refinance, etc.)
Down payment amount
Whether you’ve used your VA loan benefit before
Here’s the 2025 VA funding fee breakdown:
| Loan Type | First Use | Subsequent Use |
|---|---|---|
| 0% Down | 2.15% | 3.3% |
| 5–9.99% Down | 1.5% | 1.5% |
| 10% or More Down | 1.25% | 1.25% |
| IRRRL (Streamline Refinance) | 0.5% | 0.5% |
| Native American Direct Loan | 1.25% | 1.25% |
| Interest Rate Reduction Refinance Loan (IRRRL) | 0.5% | 0.5% |
Example: A $300,000 home with no down payment = $6,450 funding fee (2.15%).
You don’t have to pay the funding fee if you meet any of these:
You receive VA compensation for a service-connected disability.
You’re a surviving spouse of a veteran who died in service or from a service-connected condition.
You’re an active-duty Purple Heart recipient.
You’re eligible for VA compensation but receive retirement or active-duty pay instead.
These exemptions can save thousands. Be sure your Certificate of Eligibility (COE) reflects your exemption status before closing.
Yes. Most borrowers choose to roll the fee into their loan amount.
If you can afford it, paying the fee upfront will save money in the long run.
The best way to lower your fee is to make a down payment:
0% down = full fee (up to 3.3%)
5% down = fee drops to 1.5%
10% down = fee drops to 1.25%
You only need a small down payment to cut the cost in half or more.
There are two refinance options:
Yes. While the funding fee is unique to VA loans, you’ll still pay typical closing costs like:
Appraisal fees
Title insurance
Taxes and recording fees
Prepaid escrow items
Total closing costs (including the fee) typically range from 3% to 5% of the loan amount.
The VA funding fee is a one-time payment made by most veterans, service members, and eligible spouses using a VA-backed or VA direct home loan. It helps offset the cost of the loan program to taxpayers.
The fee ranges from 0.5% to 3.3% of your loan amount. The exact rate depends on your loan type, down payment, and whether it’s your first or subsequent use of the VA benefit.
No. Veterans who receive compensation for service-connected disabilities are exempt. This exemption can save thousands of dollars.
Yes. Most borrowers choose to finance the funding fee by adding it to their total loan balance. This avoids paying it upfront but increases your overall mortgage cost.
Yes. Eligible surviving spouses of veterans who died in service or from a service-connected condition do not have to pay the funding fee.
It can be. If you paid the fee but are later awarded disability compensation with an effective date before your closing, you may qualify for a refund.
Yes, unless you’re exempt. The fee applies each time you take out a VA loan. It’s higher on second or subsequent uses if you put 0% down.
You can reduce your fee by making a down payment. Putting down 5% lowers the fee to 1.5%, and putting down 10% lowers it further to 1.25%.
No. The funding fee is separate. You'll still need to pay other closing costs like the appraisal, title fees, and taxes, unless the seller agrees to cover them.
Sometimes your Certificate of Eligibility (COE) may not reflect your disability status right away. If you believe you're exempt, talk to your lender. They can help submit the correct documentation and apply for a refund if needed.
We’ve helped thousands of veterans and active-duty service members make the most of their VA loan benefits. We’ll:
Check if you're exempt from the fee.
Help you understand all closing costs.
Explore down payment options to lower the fee.
Handle your COE and paperwork at no extra cost.
Before applying, request your Certificate of Eligibility (COE). This document will show:
If you’re exempt from the fee
Your funding fee percentage
Eligibility for VA loan benefits
We can pull this for you in minutes — reach out now and get one step closer to a VA home loan with confidence.
