Posted by VA funding fees decreased in 2023 for veterans using a VA Home Loan. Now, all Regular Military, Reservists and National Guard veterans all pay the same funding fee.
VA Funding Fee Rate Chart (Effective April 7, 2023)
| VA Loan Type | Down Payment | Funding Fee First Time Use | Funding Fee Subsequent Use |
|---|---|---|---|
| Purchase | 0% | 2.15% | 3.3% |
| Purchase | 5% to 9.99% | 1.5% | 1.5% |
| Purchase | 10% or more | 1.25% | 1.25% |
| Cash Out Refinance | N/A | 2.15 | 3.3% |
| VA Streamline (IRRRL) | N/A | .5% | .5% |
| Loan Assumption | N/A | .5% | .5% |
“The VA funding fee rates for loans closed on or after April 7, 2023 as listed here…”
VA Circular 26-23-06
However, while not all VA Home Loans have new lower funding fees in 2023, the most common types do. In fact, except for exempt veterans, streamline or IRRRL refinances and VA loan assumptions the Funding fee decreased for all other VA loan types in 2023. The Funding Fee decreased for each of the following scenarios for non-exempt veterans:
- VA Purchase Loans
- New Construction Loans
- VA Cash Out Refinance Loans
How to Calculate Your Funding Fee
Calculating your Funding Fee total cost is easy. Follow these 3 steps:
- Determine Loan Amount
First, begin by finding your “base loan amount”. Your base loan equals the amount are borrowing (for both a purchase or refinance). Even if just an estimate, start by determining what your base loan amount is.
- Find Your VA Funding Fee Rate
Using the new Funding Fee chart above, determine which funding fee rate applies to your specific scenario. This rate is also called your “Funding Fee Percentage”.
- Calculate Your Funding Fee
After completing steps 1 & 2, simply multiply your loan amount by your funding fee rate. The result equals your total funding fee cost. For example
$400,000 (Loan amount) X 2.15% (Funding Fee Percentage) = $8,600 Funding Fee
Who Pays for Your Funding Fee?
Now that you understand how to calculate the Funding fee, let’s discuss who pays for it. There 3 ways the VA Funding Fee can be paid:
- Financed into your VA Loan amount
- Paid out of pocket by Veteran
- Paid by seller of home veteran purchases
In fact, the VA funding can be paid by any 1 or a combination of the 3 options above. However, VA does limit how much a seller can contribute to a Veteran on a home purchase transaction.