The VA funding fee is a one-time charge on most VA-backed loans. It helps keep the program running for future borrowers. It is not the same as mortgage insurance, and you do not pay it every month.
How the fee works
The amount depends on the type of loan, how much you put down, and whether it is your first time using the benefit. You can pay it at closing or finance it into the loan. The VA publishes the current fee table on its loan fees page, and we recommend checking it directly because the amounts can change.
Who is exempt
According to the VA, you do not pay the funding fee if you are in one of these groups:
- A veteran who receives VA compensation for a service-connected disability.
- A veteran who would receive that compensation but instead receives retirement or active-duty pay.
- A surviving spouse of a veteran who died in service or from a service-connected disability, and who receives Dependency and Indemnity Compensation.
- A service member on active duty with a proposed or memorandum disability rating from the VA before closing.
- A service member on active duty who has been awarded a Purple Heart, with evidence of the award on or before closing.
Proof matters
Lenders must establish your exempt status before closing. If it cannot be verified in time, the fee is collected as if you were not exempt. The VA can refund it later if you qualify. Your exemption is usually shown on your Certificate of Eligibility.
Ask early
If you think you might be exempt, tell your lender at the start so the paperwork is ready well before closing.
To see how the VA loan works overall, read our plain-English overview.