The VA home loan program allows military families to purchase a home without a down payment. However, any military member using the VA Home Loan Guaranty, must pay a funding fee.
The VA funding fee is a percentage of the loan that varies depending on the loan type and military category. The funding fee is applied to any VA loan, including IRRL.
Borrowers have two options:
- Pay the funding fee in cash
- Add the funding fee to the loan to finance
The fee must be payed in full at closing.
The VA funding fee is NOT considered a down payment for a loan.
Veterans are exempt from the fee if they are:
- receiving VA compensation for a service-connected disability, OR
- would be entitled to receive compensation for a service-connected disability if member did not receive retirement or active duty pay, OR
- a surviving spouse of a Veteran who died in service or from a service-connected disability
Regular military members pay a 2.15 percent fee while Reserves and National Guard members pay 2.4 percent.
For the latest chart of funding fee guidelines, click here.
