Quick answer: A 400,000 USD home with no down payment and a first-use VA loan has a 2.15% funding fee of 8,600, a loan of 408,600 and, at 6.25% over 30 years, a payment of 2,515.82 a month.
How it's calculated
The VA funding fee is a one-time charge set by the US Department of Veterans Affairs. For purchase loans (chart effective 7 April 2023) it is 2.15% for first use with under 5% down, 3.3% for later use with under 5% down, 1.5% with 5% or more down and 1.25% with 10% or more down.
The fee is usually added to the loan. The payment then uses M = P·r ÷ (1 − (1 + r)^−n), where P is the base loan plus the fee, r the annual rate ÷ 12 and n the months.
Veterans receiving VA disability compensation, eligible surviving spouses and Purple Heart recipients on active duty are exempt from the fee. For home finance in the Gulf, use the mortgage calculator.
Worked examples
- 400,000, 0% down, first use, 6.25%, 30 years: fee 8,600 → loan 408,600 → M = 2,515.82
- Same home, 10% down: base 360,000 × 1.25% = 4,500 fee
VA funding fee, purchase loans
| Down payment | First use | After first use |
|---|---|---|
| Under 5% | 2.15% | 3.3% |
| 5% or more | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
Frequently asked questions
Does a VA loan need a down payment?
Usually not, if the price is within the appraised value and you have full entitlement. A down payment lowers the funding fee.
Is there mortgage insurance on a VA loan?
No monthly mortgage insurance. The one-time funding fee takes its place.
Who is exempt from the funding fee?
Veterans receiving VA compensation for a service-connected disability, eligible surviving spouses receiving DIC, and some active-duty members with a Purple Heart or a pre-discharge rating.
Who can get a VA loan?
Eligible US veterans, service members and some surviving spouses, with a Certificate of Eligibility from the VA.
Why is the funding fee higher after first use?
The VA charges more on later loans with less than 5% down. A bigger down payment reduces the fee in both cases.
Can I pay the funding fee in cash?
Yes. You can pay it at closing or add it to the loan. Adding it, as shown here, means paying interest on it too.