What will your VA loan payment be, funding fee included?

What is the VA funding fee?

The VA funding fee is a one-time charge on VA-backed home loans that helps offset the program's cost to taxpayers, since the VA doesn't require a down payment or monthly mortgage insurance. It's usually financed directly into the loan rather than paid in cash at closing, and the rate depends on your down payment size and whether it's your first or a subsequent use of a VA loan benefit — subsequent use with little or no down payment typically carries a higher rate than a first-time use.

Why don't VA loans require PMI?

Private Mortgage Insurance exists to protect lenders against default risk on low-down-payment conventional loans. VA loans are partially guaranteed by the Department of Veterans Affairs itself, which replaces the need for PMI entirely — the one-time funding fee, rather than an ongoing monthly premium, is how that guarantee is funded instead. This is a meaningful advantage over both conventional loans with PMI and FHA loans, which charge both an upfront and an ongoing annual premium — see the FHA Loan Calculator for that comparison.

Who is exempt from the funding fee?

Veterans receiving VA disability compensation, and some surviving spouses of veterans, are generally exempt from the funding fee entirely. Eligibility rules are set by the VA and can change over time, so confirm your specific exemption status directly with the VA or your lender rather than assuming it applies — if you are exempt, simply set the funding fee field above to 0.

Can the funding fee be waived or refunded?

If you're granted VA disability compensation after closing on a loan where you already paid the funding fee, you may be eligible for a refund of that fee. This isn't automatic — it typically requires an application through the VA. Check va.gov/housing-assistance or contact the VA directly for the current process and required documentation.

Worked example: a $350,000 home with 0% down (a common VA scenario) gives a base loan of the full $350,000. A 2.15% funding fee adds $7,525, financed into the loan for a total loan amount of $357,525. At 6.5% over 30 years, the monthly payment comes to about $2,259.80 — with no PMI added on top, unlike an equivalent conventional or FHA loan at the same 0%-down scenario.