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VA Loan Funding Fee Explained - Quicken Loans Zing Blog

Disclaimer: Beginning January 1, 2020, the VA funding fee will be changing to a range of 1.4% – 3.6% based on factors like your down payment or equity amount, your service status and whether this is a first or subsequent use of a VA loan.

So you’re interested in a VA loan, but you’re confused about some of the terms? You’re not alone. Many people have questions about its many terms, conditions and eligibility requirements.

But one of the most common questions asked about VA loans is “What is the funding fee?” Fortunately, I’m here for you, friend! Allow me to explain.

Simply put, the funding fee is a cost associated with obtaining a VA loan. Because VA loans are paid for both by the government and taxpayer dollars, the funding fee helps to offset the cost of administering the loan. This helps to ensure that the loan continues to require no down payment and no monthly mortgage insurance.

There are some cases in which the VA does not charge a funding fee, but you must match a list of VA-approved situations in order to qualify for exempt status.  According to the VA, veterans/service members are exempt from paying the funding fee if:

  • You receive VA disability
  • You are eligible to receive VA disability but receive retirement benefits instead
  • You are eligible to receive VA disability as a result of a pre-discharge exam and rating
  • You are eligible to receive VA disability but have been re-enlisted or recalled to active duty
  • You are a surviving spouse of a veteran who died in service or from service-connected disabilities

Even if you do meet the criteria, your exemption status is not automatically applied to your loan. You must apply to claim the funding fee exemption, which one of our home loan experts can help you with. However, you are required to have one or more of the following documents to prove your exemption:

  • A signed VA Form 26-8937
  • A copy of the original VA notification of disability rating and documentation of the veteran’s service retirement income
  • The Certificate of Eligibility that states the borrower is entitled as an unmarried surviving spouse

It’s important to note that while all VA loans require a funding fee, the fees are not the same across the board. The amount of the fee depends on a number of factors like how much down payment you have toward your loan and your military status.

Here is a breakdown of the VA loan funding fee:

Type of Veteran Down Payment 1st Time Use Subsequent Use
Veteran/Regular Military None 2.15% 3.30%
5%-10% 1.50% 1.50%
10%  or more 1.25% 1.25%
National Guard
None 2.40% 3.30%
5%  – 10% 1.75% 1.75%
10% or more 1.50% 1.50%


Type of Veteran Down Payment 1st Time Use Subsequent Use
Veteran/Regular Military N/A 2.15% 3.3%
Reserves/National Guard N/A 2.4% 3.3%


For Veterans/Service members who want to refinance their existing VA loan, the funding fee is only .5%

You have the option to pay the funding fee in cash, or you can finance the fee with your VA loan, but you are required to pay in full at closing.

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This Post Has 26 Comments

    1. Hi Michael:

      Thank you for your service! We can certainly help you with that. If you would like to apply online, you can do so through Rocket Mortgage. Otherwise, one of our Home Loan Experts would be happy to assist you in the application process if you give us a call at (888) 980-6716. Hope this helps!


    1. Hi Michael:

      One of our Home Loan Experts would be happy to go over your situation and see if we have a loan that’s right for you at this time. You can get in touch with them by calling (888) 980-6716. Hope this helps!

      Kevin Graham

  1. I’m evaluating the pros and cons of using a VA loan vs. a conventional loan and could use some advice. I am looking at a 30 year fixed loan of $275K toward a purchase value of $650K. I’m putting down the difference as a down payment from the net sale of my current home. I was quoted a rate of 4% for a VA loan with an originating fee of only $150 plus the funding fee of 1.25%. Does it make sense to get the VA loan or stick with a conventional loan?
    Thanks in advance.

    1. Hi Nick:

      One of our Home Loan Experts would be in a much better position to go over your complete financial picture and determine which option might be right for you. My advice would be to give them a call at (888) 980-6716. Hope this helps!

      Kevin Graham

  2. My fiancé and I will be first time home buyers and both served in the military. I am so confused as to how the VA determines the $36,000 with non exempt funding fees? If we are looking at a home that is worth $175,000 and the fixed rate is 2.15% then how much will we have to put down if we both use our VA Benefits?

    1. Hi Charlene:

      Thank you both for your service. The 2.15% you’re referring to is the VA funding fee which is paid upfront instead of having to pay mortgage insurance. That’s how much you would have to pay if you put nothing down. I’m sure where the $36,000 comes from or what you would be referring to. I think it would be best if you spoke with one of our Home Loan Experts by filling out this form or calling (888) 980-6716.

      Kevin Graham

  3. My wife and I are building a home. The total va eligibility I’m approved for is 273k. Can I still add the funding fee to my mortgage if it causes the total to go above the $273 va eligibility?

    1. Hi Phillip:

      We don’t do loans for people building homes. However, I can tell you that the funding fee is not counted in your approval amount and you should be able to roll that in if you choose. Since the VA loan is a government program, the policies should be pretty similar across lenders. Hope this helps!

      Kevin Graham

  4. I’d like to refinance my VA loan, especially if I can reduce my interest rate down at least a half point from the 3.25 I’m paying now. According to the above my funding fee will be .5% which equals 1635 for a 327K loan, right? Are there a lot of other costs associated with it?

    1. Hi David:

      If you’re refinancing your VA loan based on that loan amount, your math on the funding fee is correct. As far as other closing costs, that really depends on your particular situation. It would be best to talk to a Home Loan Expert about your options and the type of rate we could offer. The best way to do this would be to get in touch either by filling out this form or calling (888) 728-4702.

      Kevin Graham

  5. My boyfriend is in the process of getting a VA quicken loan. However I am very confused and trying to find information on why they are requiring a down payment? As far as I thought there was no downpayment required. He is also disabled as well. Can someone please explain to me why they maybe asking for a down payment?

    1. Hi Lindsey:

      Every situation is different, but I’m going to have someone reach out to you and go over this so we can help answer your questions.

      Kevin Graham

  6. If I have a short term mortgage where I pay it off early…………can I get part of my funding fee returned to me ?

    1. Hi Gary:

      Unfortunately, you cannot get a refund for paying off your mortgage early. It’s a flat fee included in the cost associated with the loan. It’s not like regular mortgage insurance where you pay a monthly fee and the sooner you pay the house off, the less mortgage insurance you will have to pay. It’s more like a one-time payment. Hope this helps!

      Kevin Graham

  7. In process of getting .va loan but I’m a surviving spouse of my husband that died from disability from service I also get a check from .va for this’ I should not have to pay the loan fee.
    Please contact me

    1. Hi Dorothy:

      We can definitely have someone reach out to you and go over your situation. One of our Home Loan Experts will be in contact.

      Kevin Graham

  8. I am a 70% disabled veteran. Can I get a subsequent VA home loan without the high lending fee cost?

    1. Thanks for reaching out to us, Richard. I’ve shared your inquiry with our client relations team, and they’ll be reaching out to you within the next couple days to discuss your situation. Have a nice day!

  9. I have a few credit issues. I am a disabled vet and know I can get the no funding fee. I believe my biggest credit issue is I really didn’t have a credit score until we got my wife’s car three years ago. We have since paid that off with on time payments. Is there anyway you can help me?

    1. Hi Thomas! I’ve sent this over to our team of mortgage experts who will reach out to you. They’ll take a look at your situation and see what your options are.

  10. I know this post is older, but im hoping to get a little unsight. We havent commited to a purchase YET but have received a good faith estimate based on the price of the home we are looking to buy. The VA funding fee that is listed on this estimate is WAY higher than the 2.15% that it is supposed to be. Almost $2000 more infact. I questioned them about it and was told that is the current and accurate amount we are supposed to pay. Everything i can find completelt backs up that it should only be 2.15%. Are there any reasons why this fee would be higher or am i getting jacked around?

    1. Hi Candace! Thanks for reaching out. I’ve passed your comment on to our home loan experts who will reach out shortly.

  11. Credit issues due to becoming disabled…while unable to work, I became a victem of Universaal Credit reporting which virtually closed all our credit lines….each time we made a timelyy payment,
    Our credit line was reduced by an equal amount!

    I have avoided bankruptcy but have not been able to reconstuct several amounts, but am making progress!

    I do have my RESTORED VA Eligibility form with exemtion feom

    My house has $221,000 tax aassessed value and we owe $118000
    Equity ± $103,000!…we need to take enough out to buy a newer
    Car as ours out 12 and 21 years old!

    Do you have any programs that can help us qualify in spite of low
    Credit score??!!!!

    Income. SSA. $1894. VA Disability (tax free) $2989

    rotal income. ±$ 4 8 8 3. Monthly!….

    Please advise

    1. Hi Chris, thanks for reaching out to Quicken Loans. I have shared your inquiry with one of our home loan experts and they will contact you shortly.

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