Short answer: The VA funding fee is a one-time charge that helps fund the VA loan program; it is normally paid by the veteran borrower (or financed into the loan) but can be waived for veterans who receive VA disability compensation or for certain surviving spouses. Disabled veterans who are receiving VA disability compensation or are rated permanently and totally disabled are eligible to have the fee waived.

Key points — what the funding fee is
- A one-time fee collected on most VA-guaranteed home loans to support the program.
- It can be paid up front at closing or rolled into the loan balance.

Who pays it
- The borrower on the VA loan is responsible for the fee unless the seller agrees to pay closing costs or the fee is otherwise financed.
- Some co-borrower situations can affect responsibility; discuss specifics with your lender.

When it can be waived for disabled veterans
- The fee is waived if the veteran is receiving VA disability compensation for a service-connected disability or if the veteran has a VA determination of being permanently and totally disabled due to service.
- Surviving spouses receiving Dependency and Indemnity Compensation (DIC) may also be exempt.
- To get the waiver at closing, provide the lender the VA documentation showing entitlement to disability compensation or a VA letter indicating exempt status (for example, a benefits award letter or appropriate VA determination).

If you paid the fee and later become eligible
- You can apply for a refund by submitting documentation of your VA disability award to your lender and the VA; the VA will review and, if eligible, issue a refund of the fee already paid.

Talk with your lender or a VA loan specialist to confirm the documentation needed and the steps to get the waiver processed before closing.

The VA funding fee is a one-time cost that helps keep the VA loan program running without taxpayer funding. **The veteran/borrower pays this fee**, which typically gets rolled into the loan amount rather than paid out of pocket at closing.

**How much the fee costs depends on:**
- Your military service category (regular military, Reserves, National Guard)
- Down payment size (if any)
- Whether this is your first VA loan or a subsequent use
- Your disability rating from the VA

For first-time VA loan users with zero down payment, the fee generally runs 2.15%-2.40% of the loan amount. Making a down payment of 5% or more reduces the fee significantly. Subsequent uses of the VA loan benefit carry slightly higher fees.

**Funding Fee Waivers for Disabled Veterans:**

The fee is **completely waived** if you receive VA disability compensation, even at just 10% disability rating. You must have this rating documented before or at closing to receive the waiver.

Also waived for:
- Veterans eligible to receive disability compensation but receiving retirement or active duty pay instead
- Surviving spouses of veterans who died in service or from service-connected disabilities

**Important timing note:** If you close on your loan before your disability rating comes through, you typically cannot get a retroactive refund of the funding fee. Work with your lender to delay closing if your VA disability claim is pending and likely to be approved soon.

The waiver can save thousands of dollars on a typical loan. For example, on a $400,000 loan, avoiding the 2.15% fee saves $8,600 that would otherwise be added to your mortgage balance.

The VA funding fee is a one-time payment made to the Department of Veterans Affairs that helps lower the cost of the loan for U.S. taxpayers. The borrower pays this fee, which is a percentage of the loan amount, and it is typically financed into the total loan balance rather than paid out-of-pocket at closing.

The exact percentage of the fee varies based on several factors, including:
* **Your down payment amount:** A larger down payment can reduce the fee.
* **Type of service:** The fee differs slightly for regular military versus Reserves or National Guard.
* **Loan purpose:** The fee for a cash-out refinance is different from a purchase loan.
* **Prior VA loan use:** The fee is generally higher for veterans who have used their VA loan benefit before (known as subsequent use).

Certain veterans are exempt from paying the VA funding fee. You are typically not required to pay the fee if you are a veteran who is:
* Receiving VA compensation for a service-connected disability.
* Entitled to receive VA compensation for a service-connected disability, but you're receiving retirement or active-duty pay instead.
* A surviving spouse of a veteran who died in service or from a service-connected disability.
* An active-duty service member who provides evidence of having been awarded the Purple Heart before the loan closes.

To confirm your exemption, you will need a Certificate of Eligibility (COE) that states you are exempt from the funding fee. If you have a disability claim pending with the VA when you close your loan, you will likely have to pay the fee. However, if your disability is later approved with an effective date before your closing date, you can apply to the VA for a refund of the funding fee you paid.