VA Loan Funding Fee’s

The veteran must pay a funding fee to help defray costs of the VA home loan program.


The VA home loan program involves a veteran’s benefit. VA policy has evolved around the objective of helping the veteran to use his or her home loan benefit. Therefore, VA regulations limit the fees that the veteran can pay to obtain a loan.

Lenders must strictly adhere to the limitations on borrower-paid fees and charges when making VA loans.

In order to defray the cost of administering the VA home loan program, each veteran must pay a funding fee to VA at loan closing.

Congress may periodically change the funding fee rates to reflect changes in the cost of administering the program, or to assist a certain class of veterans

Purchase and Construction Loans

Funding Fee Tables

: The funding fee for ALL subsequent use loans closed on or after October 1, 2006, and before October 1, 2007, is 3.35 percent. This applies to all purchase loans where no down payment of 5 percent or more is made as well as cash-out refinances where the fee would have been 3.3 percent. Effective October 1, 2007, the subsequent use fee reverts back to 3.3 percent.

Lenders must remit the VA funding fee via the VA Funding Fee Payment System (FFPS); within 15 calendar days of loan closing.

Lenders paying the fee more than 15 days after loan closing will automatically be assessed a four percent late fee. Fees paid more than 30 days late will automatically be assessed an interest charge in addition to the late fee.

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