Mortgage glossary
Funding fee (VA)
Definition: The VA funding fee is a one-time charge paid to the Department of Veterans Affairs on most VA loans, helping fund the program in place of monthly mortgage insurance.
The fee is a percentage of the loan amount that varies with the type of loan, the size of the down payment, and whether the veteran has used VA benefits before. It can be paid in cash at closing or financed into the loan. VA loans do not carry monthly mortgage insurance.
Veterans with a service-connected disability rating of 10% or more are exempt from the funding fee, and certain other borrowers are also exempt. In Texas, 100% disabled veterans are also exempt from property taxes on their homestead, which can significantly lower the total housing payment.
Related terms
Reviewed by Kyle Richardson, NMLS #863464. General information, not advice for your specific situation. All glossary terms
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