VA Funding Fee Explained: What It Is and Who Pays It
The short answer
The VA funding fee is a one-time charge on most VA loans that helps keep the program running for future veterans. The amount depends on your down payment, whether it's your first use of the benefit, and your service category, and some borrowers are exempt.
How the fee works
- It varies: The percentage is set by the VA and can change. Putting money down generally lowers it, and using your benefit again may raise it.
- Some borrowers are exempt: Veterans receiving VA disability compensation and certain surviving spouses are typically exempt. Your Certificate of Eligibility will help confirm this.
- You can pay it two ways: Pay at closing, or roll it into the loan amount so it doesn't come out of your pocket on day one. Rolling it in increases the loan balance.
- It isn't mortgage insurance: VA loans don't carry monthly PMI, which is a big part of why many veterans like them.
Tips for Texas buyers
- Get your Certificate of Eligibility early so exemption status is clear.
- Ask for a side-by-side comparison with and without a down payment.
- Check out our related read on VA loans in North Texas.
Frequently asked questions
Can the funding fee be financed?
In most cases, yes. It can be added to the loan amount, which raises the balance slightly.
Do I pay it every year?
No. It's a one-time fee tied to the loan, not a monthly or annual charge.
Curious how this looks for your situation? Call us at (469) 414-5554 or start here: https://mohavemortgages.net/home-texas.
By Kelly Welton, Mortgage Broker (NMLS #314183), Mohave Mortgage Texas Branch. Mohave Mortgage NMLS #1830581 · Texas Branch NMLS #2690682 · Equal Housing Opportunity. General information only, not a commitment to lend or financial advice. Programs, rates and guidelines vary and change.
