The VA Funding Fee is paid directly to the Department of Veteran's Affairs and is the reason they can guarantee this no-money-down loan program. This fee is paid so that VA eligibile borrowers can enjoy loan benefits such as $0 down financing and no mortgage insurance (PMI) payments.
The Funding Fee is calculated by looking at 4 different factors: Loan type (Purchase or Refinance), type of service, down payment (if any) and prior VA loan use. Take a look at the charts below to determine the amount of your VA Funding Fee.
| Down Payment | Active Duty/Retired | Guard/Reserve |
|---|---|---|
| Less than 5% Down | 2.3% | 2.3% |
| 5-10% Down | 1.65% | 1.65% |
| 10% or More | 1.4% | 1.40% |
| Down Payment | Active Duty/Retired | Guard/Reserve |
|---|---|---|
| Less than 5% Down | 3.6% | 3.6% |
| 5-10% Down | 1.65% | 1.65% |
| 10% or More | 1.4% | 1.40% |
| VA Usage | Active Duty/Retired | Guard/Reserve |
|---|---|---|
| 1st Time Use | 2.3% | 2.3% |
| Additional Use | 3.6% | 3.6% |
| VA Usage | Active Duty/Retired | Guard/Reserve |
|---|---|---|
| 1st Time Use | 0.5% | 0.5% |
| Additional Use | 0.5% | 0.5% |
The VA Funding Fee is typically included in the loan, but can also be paid by the seller or by the borrower at the closing table.
A VA IRRL is a refinance of an existing VA mortgage. If you are refinancing from any other loan type that is not VA, the loan cannot be an IRRL and standard underwriting guidelines, funding fees, appraisal requirements and termite inspection will apply.
Borrowers are exempt from paying the funding fee if they receive any disability payments from the VA or are considered at least 10% disabled.
If you have any questions about your VA loan benefit, the Funding Fee, Funding Fee Exemptions or how the VA Funding Fee chart works please contact Bill Marshall.