What is the VA Funding Fee and who is exempt?

The VA Funding Fee is a one-time charge the VA uses to self-fund the loan guarantee program. For a first-time VA buyer with zero down, the fee is typically 2.15% of the loan amount. For subsequent VA loans, it rises to 3.3%. The fee can be financed into the loan or paid at closing. Veterans with a service-connected disability rating of 10% or more, surviving spouses of veterans who died in service, and recipients of the Purple Heart are fully exempt from the Funding Fee.