Check for an exemption first
Qualifying service-connected compensation, certain surviving-spouse DIC benefits, eligible pre-discharge ratings, or active-duty Purple Heart status may exempt you from the funding fee. Confirm your status before closing.
Purchase funding fee
For non-exempt borrowers putting less than 5% down, the fee is 2.15% for first use or 3.30% for subsequent use. At 5% down it is 1.50%; at 10% down it is 1.25%. The percentage applies to the base loan after down payment.
Cash at closing
A financed funding fee increases your balance and interest cost. Purchase closing costs generally cannot simply be added to the VA loan. Negotiated seller credits or lender credits may help; understand the tradeoff. Ordinary closing-cost credits and the 4% seller-concession limit are different categories.
Ask for the written estimate
Review cash to close, points, lender credits, prepaid insurance, taxes and escrow deposits. Ask which costs are estimates and what could change.
Read the official guidance
VA • Funding fees & closing costs ↗CFPB • Loan Estimate explainer ↗Sources reviewed October 25, 2026. Requirements can change. Ask Sasha to help apply the information to your situation.