VA funding fee

VA loans don't charge monthly mortgage insurance. Instead, most borrowers pay a one-time funding fee. On a first-time purchase loan it's 2.15% of the loan with less than 5% down, 1.5% with 5% or more, and 1.25% with 10% or more. Later uses cost 3.3% with less than 5% down, and a rate-reduction refinance (IRRRL) costs 0.5%.

Most borrowers roll the fee into the loan instead of paying it at closing, which means paying interest on it for the life of the loan.

Veterans who receive VA disability compensation, some Purple Heart recipients, and certain surviving spouses are exempt from the fee.