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VA Funding Fee

The Veterans Administration works off of a “guaranty”, meaning that they pay the lender 25% of the loan amount should the veteran default on their mortgage. This is the main reason the VA loan program still requires no money down. The VA doesn’t make loans, lenders do and the VA guarantees the lender that if a VA mortgage should go into foreclosure, the VA guarantees to the lender 25%. Below is the VA Funding Fee schedule. The VA funding fee can be rolled into the loan amount in most cases. There is no monthly mortgage insurance on VA loans.

A veteran may be exempt from the funding fee and VA Form 26-8937 (pdf), Verification of VA Benefits must be completed by your lender if one of the following apply:

  • Veteran receiving VA compensation for service-connected disabilities.
  • Veteran would be entitle to receive compensation for service-connected disabilities if they did not receive retirement pay.
  • Surviving spouse of a veteran who died in service for from service-connected disability.
  • Has received a VA disability in the past.

If you think you are exempt or you are not sure, let us know and we can fax VA Form 26-8937 to the VA for confirmation. The turnaround time is usually 24-48 hours.



(effective 10/1/2004)

Purchase and Construction Loans
Veteran Type Down Payment  

Percentage for

First-Time Use


Percentage for

Subsequent Use

None 2.15% 3.30%
Regular Military 5% or more 1.50% 1.50%
10% or more 1.25% 1.25%
None 2.40% 3.30%
National Guard/Reserves 5% or more 1.75% 1.75%

10% or more 1.50% 1.50%
Other Loans
Type of Loan Percentage for Either Type of Veteran
Interest Rate Reduction Refinance (IRRRL) 0.50%
Loan Assumptions 0.50%

NOTE: Unlike FHA’s Mortgage Insurance Premium (MIP), the VA Funding Fee is nonrefundable.