A guide to VA loan funding fees

What is the funding fee for a VA Loan?

  • First time use – Regular Military with no down payment is 2.15%
  • With a 5% down payment = 1.5%
  • With a 10% or more down payment = 1.25%
  • Guard/Reserves No down payment = 2.40%
  • With a 5% down payment = 1.75%
  • With a 10% or more down payment = 1.5%
  • Cash out refinancing loans Regular military = 3.30%
  • Guard/Reserves = 3.30%

Interest Rate Reduction Refinancing Loans

  • The funding fee is .5% unless a manufactured home, the fee is 1.00%

VA Funding Fees for Purchase and Construction Loans

Type of Veteran Down Payment First Time Use Subsequent Use for loans from 1/1/2004 to 9/30/2011
Regular Military None:
5% or more (up to 10%):
10% or more:		 2.15%
1.50%
1.25%		  3.3%  *
1.50%
1.25%
Reserves/National Guard None:
5% or more (up to 10%):
10% or more:		 2.4%
1.75%
1.5%		  3.3%  *
1.75%
1.5%

Note: The funding fee for regular military first time use is 2.15 percent

VA Funding Fees for Cash-Out Refinancing Loans

Type of Veteran Percentage for First Time Use Percentage for Subsequent Use
Regular Military 2.15% 3.3% *
Reserves/National Guard 2.4% 3.3% *

* The higher subsequent use fee does not apply to these types of loans if the veteran’s only prior use of entitlement was for a manufactured home loan.

VA Funding Fees for Other Types of Loans

Type of Loan Percentage for Either Type of Veteran  Whether First Time or Subsequent Use
Interest Rate Reduction Refinancing Loans .50%
Manufactured Home Loans 1.00%
Loan Assumptions .50%

No PMI Needed for VA Loans

For conventional mortgage home loans, Private Mortgage Insurance (PMI) is normally required when the loan to value of a purchase or refinance exceeds 80%. The so called PMI is used to guaranty to the lender that their loan, to the extent it exceeds 80%, will be paid off in the event of default. Your VA loan guaranty from the VA and GNMA is the perfect replacement for PMI. You borrow the whole amount from one lender and the guaranty from the government replaces PMI. Except for the rarest of rare cases, if at all, PMI will not be a consideration for your VA loan.