VA Funding Fee Explained Who Pays It and Who Gets Out of It Entirely

If you're a veteran buying a home in Hampton Roads, there's one number you need to know before you ever sit down at the closing table and most people don't ask about it until it's too late.

It's called the VA funding fee.

What Is the VA Funding Fee?

The VA funding fee is a one-time charge that gets rolled directly into your VA loan. You don't pay it out of pocket at closing. It's built into your loan amount. But make no mistake, it's real money.

For first-time VA loan use, the fee is typically around 2% of the loan amount. Use your VA benefit again after that and it goes up from there.

On a $350,000 home, that's roughly $7,000 added to your loan balance before you even move in.

Who Doesn't Have to Pay the VA Funding Fee?

Here's where it gets important and where a lot of veterans leave money on the table simply because they didn't know to ask.

If you have a service-connected disability rating of 10% or higher, you are exempt from the VA funding fee entirely.

Zero. Nothing. That's potentially thousands of dollars you never have to borrow, pay interest on, or carry into your mortgage.

This exemption also applies to:

Veterans receiving VA compensation for a service-connected disability, surviving spouses of veterans who died in service or from a service-connected disability, and veterans rated as having a pre-discharge disability.

Why This Changes the Math

Most buyers focus on the interest rate and the monthly payment. But your funding fee status changes the real cost of your loan from day one.

Skipping that 2% fee on a $400,000 purchase saves you $8,000 upfront and reduces the balance you're paying interest on for the life of the loan. That's real savings, compounded over 30 years.

Know Your Status Before You Close

Your lender will ask for your Certificate of Eligibility, but they don't always confirm your disability rating before calculating your loan. That's on you to bring to the table.

Pull your VA rating. Know your status. Tell your lender before the loan is processed, not after.

If you're not sure of your current rating or how to verify your exemption status, the VA's eBenefits portal and your regional VA office are your best starting points.

Watch the video below for a quick breakdown.

Work With Someone Who Knows the VA Loan Inside and Out

About the Author

John King is a Navy veteran and licensed real estate agent with Berkshire Hathaway RW Towne Realty serving Virginia Beach, Norfolk, and the greater Hampton Roads area. With firsthand knowledge of VA loans and the local market, John helps veterans and civilians alike navigate one of life's biggest decisions.

📞 757-270-3994 🌐 757King.com 📧 [email protected]

Based in Virginia Beach. Serving Hampton Roads including Norfolk, Chesapeake, and beyond.