A VA funding fee is applied to most VA home loan purchases and refinance. The funding fee is a percentage of the loan amount which varies based on the type of loan and your military category, if you are a first-time user, and whether you make a down payment. This fee goes back into the VA home loan program and makes it self-sustaining and available for future veterans. You have the opportunity to either pay the funding fee in cash by closing or to work it into the home loan.

You do not have to pay the funding fee if you are a:

• Veteran receiving VA compensation for a service-connected disability
• Surviving spouse of a Veteran who died in service or from a service-connected disability

For the veterans that do not have to pay the funding fee, it is one more way of saying “thank you for your service!” The funding fee is what keeps the program alive and allows other veterans to have the benefit of becoming a home owner.