Military Veterans must know about the VA funding fee. VA loans do come with a mandatory funding fee that goes directly to the VA. This fee helps to keep the program running for future generations of military homebuyers.

The VA funding fee, which is a percentage of the loan amount, varies based on the type of loan, the borrower’s military category, whether the borrower is a first-time or subsequent loan user, and whether the person makes a down payment. The VA funding fee must be paid at closing time, but borrowers have the option to either finance the VA funding fee or pay it in cash.

The VA funding fee for second-time loan users who do not make a down payment is slightly higher. In addition, National Guard and Reserve service members and Veterans have to pay a slightly higher funding fee percentage than active duty service members.

Some people are exempt from paying the VA funding fee and they are outlined below.

Generally, all Veterans obtaining a VA loan must pay the VA funding fee; there are a few exceptions.
The following people do not have to pay the VA funding fee:
• A Veteran receiving VA compensation for a service-connected disability
• A Veteran who would be entitled to receive compensation for a service-connected disability if that Veteran did not receive retirement or active duty pay or
• Surviving spouse of a Veteran who died in service or from a service-connected disability.

NOTE: With VA loans, the VA guarantees the loan (VA-Backed loan), but does not lend the money. The lender is the one lending the money to the Veteran borrower. As a reminder, VA loans come with a funding fee that goes to the VA.

Providing Solutions Because…Your Move Matters!

Michael L. Brownstead
First Sergeant, U.S. Army (Retired)
Broker Associate
Keller Williams Realty
ABR, GRI, MRP, SRS, REALTOR
1002 Raintree Cir., Ste. 100, Allen, TX 75013
E-mail: [email protected]
Cell: 214-872-0400