Couple working through calculating the funding fee in their kitchen with a calculator and pen with paper.

If you’re looking for a home, you’re in for a treat. VA loans have some of the best terms available, including the ability to buy a house with no down payment. 

But you still must consider VA loan closing costs.

Some borrowers worry about the VA funding fee, but it’s not as bad as you think. 

And the VA loan experts at the Wendy Thompson Lending Team can help. 

We’re going to tell you what the funding fee is and how to calculate it. 

But that’s not all…

There are ways to lower the funding fee or get out of paying it altogether. Keep reading to find out how.


The VA funding fee is a one-time payment that a homebuyer pays when purchasing a home with a VA loan. It’s based on a percentage of the total amount you borrow.

Why do you have to pay a fee?

Great question. 

VA loans let you buy a house without a down payment or mortgage insurance. 

However, if a borrower defaults and can’t pay their mortgage, it can cost the VA a lot of money.

Since U.S. taxpayers fund the Department of Veterans Affairs, a funding fee helps to lower the costs that taxpayers have to pay.

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Most homebuyers using a VA home loan must pay a funding fee. Although, there are a few exceptions - and we’ll get to those in a minute.

In the meantime, let’s talk about how to calculate the VA loan funding fee.

But first, you need to know that it depends on two things:

  • How much your down payment is
  • If you’ve ever had a VA loan before

Here’s a look at the VA funding fee chart for VA loan closing costs 2021:

Down Payment Amount

First-Time Use

Subsequent Use

0% to 4.99%



5% to 9.99%



10% or more



If you’ve had a VA loan before, it’s considered “subsequent use.” Otherwise, your funding fee is determined by the first-time use rate.

Let’s look at an example. Say you’re buying a house for $230,000. It’s your first time using the VA loan program, and you’re not putting any money down. Here, your funding fee is 2.30%, which equals $5,290.


The funding fee is the one downside to getting a VA loan. 

But here’s the thing.

When you work with the Wendy Thompson Lending team, you can still come out ahead.

Here’s how:

We want you to get the best terms available when buying your new home. That means we’re sharing two insider tips to help lower your VA funding fee or eliminate it altogether.

1. Put More Money Down

The more money you put down, the lower your funding fee will be.

Remember when I said the VA funding fee helps offset the cost of VA loans to the taxpayer? When you have a down payment, you’re lowering the burden on the Department of Veterans Affairs. 

And it rewards you with a lower funding fee.

Let’s go back to the earlier example of buying a $230,000 house. Remember, your funding fee was $5,290 with no down payment.

But what if you could put 5% down?

The funding fee drops to $3,795.

That’s a savings of almost $1,500!

2. See If You Qualify for a VA Funding Fee Exemption

Generally, everyone has to pay a funding fee when using a VA home loan. But a few exceptions exist.

You won’t have to pay a VA funding fee if you’re:

  • Eligible to receive or are receiving VA compensation for a service-connected disability
  • A surviving spouse of a Veteran who died while serving or from a service-related disability
  • A recipient of the Purple Heart


The funding fee isn’t the only closing cost you’ll pay. There are a few things that can add to your total, including discount points, lender fees, an appraisal, and property taxes.

With all those costs, the fee can add up. I bet you’re wondering….

Can you roll in closing costs on a VA loan?


You don’t have to pay the VA funding fee or all of the closing costs out of pocket. Rolling it into your loan gets you off the hook for bringing a bunch of cash to closing, which can be a huge relief.

Keep in mind that it makes your total loan costs higher, increasing your monthly payment.


One of the most stressful events in life is buying a home. You want the experience to be as pleasant as possible, right?

VA loans require a certain amount of expertise. A lot goes into making sure you get the Certificate of Eligibility done right the first time and don’t miss out on any exemptions or loopholes that can save you money.

If you’re ready to make your dreams of owning a home come true, call the Wendy Thompson Lending Team today!

The Tactical FHA Loan Blueprint

Deciding on the right VA lender is the most important decision you will make. Choosing the wrong lender can result in you losing your dream home or costing you hundreds of thousands of dollars in more interest over the life of your mortgage.  

Don’t make that mistake, contact the Wendy Thompson Lending Team today!  

You can start the process by clicking the yellow 'See if I'm Eligible' button on the right side bar under the 'Start your quote for a Home Loan'  or call Wendy’s Team directly at (901) 250-2294, to get started on living the American Dream in the home of your Dreams!