VA Home Loan Funding Fee Calculator

What Is the VA Funding Fee?

The VA funding fee is a one-time charge required on most loans backed by the U.S. Department of Veterans Affairs.

It exists to:

• Keep the VA loan program self-funded
• Reduce the cost to taxpayers
• Allow benefits like no down payment and no private mortgage insurance (PMI)

The fee is usually a percentage of your base loan amount.

Current VA Funding Fee Rates (Effective April 7, 2024)

Funding fee rates depend on:

• Loan type
• Whether it’s your first time using a VA loan
• Your down payment amount
• Whether you qualify for a disability exemption

Here are the rates used in the calculator:

These rates can change, so always confirm with a VA-approved lender.

Who Is Exempt from the VA Funding Fee?

Some borrowers do not pay the funding fee at all.

You may be exempt if you:

• Receive VA compensation for a service-connected disability
• Are eligible for disability compensation but receive retirement pay instead
• Are a surviving spouse of a veteran who died in service or from a service-related disability

If you qualify, your funding fee rate becomes 0%.

That can save you thousands of dollars.

How the VA Funding Fee Calculator Works

The calculator uses simple inputs to generate your results. Here’s what it asks for and why it matters.

1. Base Loan Amount

This is the amount you’re borrowing before adding the funding fee.

Example:
If you’re buying a $300,000 home with no down payment, your base loan amount is $300,000.

2. Loan Type

You can choose:

• Purchase Loan
• IRRRL (Interest Rate Reduction Refinance Loan)
• Cash-Out Refinance

Each loan type has a different funding fee structure.

3. Down Payment (For Purchase Loans)

Down payment affects the funding fee if this is not your first VA loan.

If you put down 5% or more on a subsequent use purchase, your funding fee drops to 1.5%.

That’s a big difference.

4. First-Time or Subsequent Use

If you’ve used your VA loan benefit before, your rate may be higher unless you make a qualifying down payment.

The calculator automatically adjusts the rate based on your answer.

5. Disability Exemption Status

If you select “Yes” for receiving VA disability compensation, the calculator:

• Sets your funding fee rate to 0%
• Shows your exemption status
• Explains the benefit in the bottom line summary

This step overrides all other rate rules.

6. How You’ll Pay the Funding Fee

You have two options:

Option 1: Roll the Fee Into the Loan

• The funding fee gets added to your mortgage balance
• You pay it over time
• Your loan amount increases

Option 2: Pay the Fee in Cash at Closing

• Your loan amount stays lower
• You bring more money to closing

The calculator shows both your new loan total and cash required at closing depending on your selection.

Example Calculation

Let’s walk through a real example.

Scenario:

• $250,000 purchase
• First-time VA use
• No down payment
• No disability exemption
• Roll funding fee into the loan

Step 1: Funding Fee Rate
First-time purchase rate = 2.15%

Step 2: Funding Fee Amount
$250,000 × 2.15% = $5,375

Step 3: New Loan Amount
$250,000 + $5,375 = $255,375

If rolled into the loan, you don’t pay that $5,375 upfront. It becomes part of your mortgage balance.

How the Calculator Determines the Rate

The calculator follows this logic:

1. If disability exemption = Yes → rate = 0%
2. If IRRRL → rate = 0.5%
3. If first-time purchase → rate = 2.15%
4. If subsequent purchase:
   • Down payment ≥ 5% → 1.5%
   • Down payment < 5% → 3.3%
5. If cash-out refinance → 3.3%

This structure mirrors the official VA funding fee guidelines.

Why the Funding Fee Matters

Even though it’s a one-time cost, the funding fee can:

• Add thousands to your loan
• Increase your monthly payment if rolled in
• Change how much cash you need at closing

Understanding this number early helps you:

• Plan your savings
• Compare loan options
• Decide whether to roll the fee into the loan

Should You Roll the VA Funding Fee Into the Loan?

There’s no one right answer.

Roll it in if:

• You want to minimize upfront cash
• You’re tight on closing funds

Pay it in cash if:

• You want a smaller loan balance
• You want to reduce total interest over time

The calculator shows both outcomes so you can compare.

Important Disclaimer

This calculator provides estimates based on VA funding fee rates effective for loans closed on or after April 7, 2024.

Rates can change.

For official loan terms and to confirm exemption status, speak with a VA-approved lender.