What Is a VA Funding Fee?

What Is a VA Funding Fee?

The VA Funding Fee is a surcharge attached to each home purchase loan or refinance taken by a U.S. veteran. It is intended to help the VA offset losses incurred by defaulting borrowers.

The VA Funding Fee is not paid by veterans in receipt of VA compensation for disabilities connected to military service, nor veterans who opted for retirement or active duty pay in lieu of compensation for disabilities connected to military service. The VA Funding Fee is also not charged to the surviving spouses of veterans killed either in service or as a result of a disability connected to military service.