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VA loans are one of the unique benefits available only to veterans and active military members.  Because of the many advantages that VA home loans have, it’s a popular choice for military families. 

Some of the benefits include more lenient credit requirements, lower interest rates, and no required mortgage insurance. You can also get a VA loan with no down payment. However, you will have to pay a funding fee.

Here’s a look at what that is and why it’s required.   

What Is A VA Funding Fee?

A VA funding fee is a funding fee of 2.15% – 3% of the loan amount. It is required, though it does not have to be paid in cash. Many homebuyers opt to roll the funding fee into closing costs, keeping upfront out of pocket expenses minimal. 

Additionally, there are two instances where you are exempt from the VA funding fee. First, if military members have had service related disabilities they will be exempt from paying a VA Funding Fee. If a veteran passed away during service, their spouse is also exempt from a funding fee.

Why Do I Have To Pay It?

With the benefits of VA loans, including low mortgage rates and no required down payment, lenders must have some security tied to the loan. The VA funding fee serves this purpose, charging a small proportion of the loan. 

How Much Is The VA Funding Fee?

The fee range depends on several factors, including your down payment and whether you are a first time home buyer. Below are the general VA funding fee costs.

Current and Former Military Members:

  • Down payment of less than five percent: 2.15% Funding Fee
  • Down payment between five and 10 percent: 1.5% Funding Fee
  • Down payment greater than 10 percent: 1.25% Funding Fee

Army Reserves/National Guard:

  • Down payment of less than five percent: 2.4% Funding Fee
  • Down payment between five and 10 percent: 1.75% Funding Fee
  • Down payment greater than 10 percent: 1.50% Funding Fee

How Can A VA Loan Help Me?

One of the principles of the American dream is home ownership. By using VA home loans, you can achieve this goal. If you’re a veteran, VA loans can help you and your family find the house of your dreams. 

If you’d like to find out more about the VA loan process and how to apply today to take the next step toward owning your home, contact us and speak with one of our VA home loan specialists!


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