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HOUSING ASSISTANCE

VA-backed home loans
 * Loan types
   * Purchase loan
   * Native American Direct Loan
   * Interest rate reduction refinance loan
   * Cash-out refinance loan
 * Eligibility
 * How to request a COE
 * Request a COE online
 * Surviving spouse programs
 * Check your COE status
 * Check claim, decision review, or appeal status
 * Request a decision review
 * VA help to avoid foreclosure
 * Warning about refinancing offers
 * Funding fee and closing costs
 * Home loan limits
 * Find VA-acquired properties
 * Buying a home with a VA-backed loan
 * Guidance on natural disasters

In this section



VA FUNDING FEE AND LOAN CLOSING COSTS

Learn about the VA funding fee and other closing costs you may need to pay on
your VA-backed or VA direct home loan.


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.

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. 

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?

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.


VA FUNDING FEE RATE CHARTS

Effective April 7, 2023

Review the VA funding fee rate charts on this page to determine the amount
you’ll have to pay. Down payment and VA funding fee amounts are expressed as a
percentage of total loan amount.

For example: Let’s say you’re using a VA-backed loan for the first time, and
you’re buying a $200,000 home and paying a down payment of $10,000 (5% of the
$200,000 loan). You’ll pay a VA funding fee of $2,850, or 1.5% of the $190,000
loan amount. The funding fee applies only to the loan amount, not the purchase
price of the home.


VA-BACKED PURCHASE AND CONSTRUCTION LOANS

RATES FOR VETERANS, ACTIVE-DUTY SERVICE MEMBERS, AND NATIONAL GUARD AND RESERVE
MEMBERS

If your down payment is… Your VA funding fee will be… First use Less than 5%
2.15% 5% or more 1.5% 10% or more 1.25% After first use Less than 5% 3.3% 5% or
more 1.5% 10% or more 1.25% If your down payment is…Your VA funding fee will be…
First use Less than 5% 2.15% 5% or more 1.5% 10% or more 1.25% After first use
Less than 5% 3.3% 5% or more 1.5% 10% or more 1.25%

Note: If you used a VA-backed or VA direct home loan to purchase only a
manufactured home in the past, you’ll still pay the first-time funding fee.


VA-BACKED CASH-OUT REFINANCING LOANS

RATES FOR VETERANS, ACTIVE-DUTY SERVICE MEMBERS, AND NATIONAL GUARD AND RESERVE
MEMBERS

First use After first use 2.15% 3.3% First useAfter first use 2.15% 3.3%

Note: The VA funding fee rates for refinancing loans don’t change based on your
down payment amount. If you used a VA-backed or VA direct home loan to purchase
only a manufactured home in the past, you’ll still pay the first-time funding
fee.


NATIVE AMERICAN DIRECT LOAN (NADL)

Type of use VA funding fee Purchase 1.25% Refinance 0.5% Type of useVA funding
fee Purchase 1.25% Refinance 0.5%

Note: The VA funding fee rate for this loan doesn’t change based on your down
payment amount or whether you’ve used the VA home loan program in the past.


OTHER VA HOME LOAN TYPES

Loan type VA funding fee Interest Rate Reduction Refinancing Loans (IRRRLs) 0.5%
Manufactured home loans (not permanently affixed) 1% Loan assumptions 0.5%
Vendee loan, for purchasing VA-acquired property 2.25% Loan typeVA funding fee
Interest Rate Reduction Refinancing Loans (IRRRLs) 0.5% Manufactured home loans
(not permanently affixed) 1% Loan assumptions 0.5% Vendee loan, for purchasing
VA-acquired property 2.25%

Note: The VA funding fee rates for these loans don’t change based on your down
payment amount or whether you’ve used the VA home loan program in the past.


OTHER LOAN CLOSING COSTS


WHO DETERMINES MY LOAN DETAILS?

We don’t determine most details of your home loan.

Your home loan lender will determine these details of your loan:

 * Interest rate
 * Discount points (fees you may pay to your lender at closing to get a lower
   interest rate on your loan)
 * Other closing costs

These rates may vary from lender to lender. You should know that adding the VA
funding fee and other loan costs to your loan could lead to you owing more money
than the fair market value of the home. This could reduce the benefit of
refinancing since your payment wouldn’t be as low as you may want it to be. It
could also make it harder for you to get enough money out of the future sale of
the home to pay off your loan balance.


WHO PAYS FOR WHICH CLOSING COSTS?

The seller must pay these closing costs (sometimes called seller’s concessions):

 * Commission for real estate professionals
 * Brokerage fee
 * Buyer broker fee
 * Termite report (unless you’re using a refinancing loan)

You (the buyer) or the seller can negotiate who will pay other closing costs
such as these:

 * VA funding fee
 * Loan origination fee
 * Loan discount points or funds for temporary “buydowns”
 * Credit report and payment of any credit balances or judgments
 * VA appraisal fee
 * Hazard insurance and real estate taxes
 * State and local taxes
 * Title insurance
 * Recording fee

Note: We require that a seller can’t pay more than 4% of the total home loan in
seller’s concessions. But this rule covers only some closing costs, including
the VA funding fee. The rule doesn’t cover loan discount points.


MORE VA HOME LOAN RESOURCES

 * Learn how VA-backed and VA direct home loans work—and find out which loan
   program might be right for you.

 * Find out if you can get a Certificate of Eligibility (COE) for a VA-backed or
   VA direct home loan based on your service history and duty status.

 * Find out how to request a COE.

 * Find out if you’re eligible and how to request a VA home loan COE as the
   surviving spouse of a Veteran or the spouse of a Veteran who is missing in
   action or being held as a prisoner of war.

Last updated: April 7, 2023

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