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VA Funding Fee

Paid directly to the Department of Veterans Affairs to ensure mortgage lenders are protected in case of loan default.

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The VA Funding Fee

The VA funding fee is a one-time payment required for most VA home loans. It is designed to offset the costs of the VA loan program, ensuring it remains sustainable for future veterans. The fee is paid directly to the Department of Veterans Affairs (VA) and acts as a safeguard for mortgage lenders, covering potential losses in case of loan default. The amount of the fee varies based on factors like the loan type, the borrower's military service status, down payment size (if any), and whether the borrower has used the VA loan benefit before. Borrowers can choose to pay the fee upfront or roll it into their loan balance. Certain veterans, like those with service-related disabilities, may be exempt from paying this fee.

VA Purchase or Construction Loans

	Down Payment Amount	Funding Fee Percentage
First Use	Less than 5%	2.15%
	5% or more	1.50%
	10% or more	1.25%
Subsequent Use	Less than 5%	3.30%
	5% or more	1.50%
	10% or more	1.25%
Disabled Veteran		Exempt

VA Cash-Out Refinance

	Funding Fee Percentage
First Use	2.15%
Subsequent Use	3.3%
Disabled Veteran	Exempt

Other VA Home Loan Types

Loan Type	Funding Fee Percentage
Interest Rate Reduction Refinance Loans (IRRRLs)	0.5%
Manufactured Home Loans (not permanently affixed)	1%
Loan Assumptions	0.5%
Native American Direct Loan (Non-IRRRL)	1.25%
Disabled Veteran	Exempt

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