Understanding the VA Funding Fee updated for 2020

So if you are not receiving compensation for a service connected disability, then the VA charges you a funding fee for the privilege of using their loan.

Don’t worry, you do not have to pay it out of pocket, it is rolled into your loan. For example, if you are borrowing $100,000 and you were regular military first time use $0 down payment, then your total loan amount would be $102,300.

This fee is a portion of the way the VA pays their bills. According to their website, this eases the cost to tax payers.

The funding fee is a percentage of the loan amount and it is a complication of tiers based on your military category, if you are a first time user and if you are making a down payment.

Below is a copy of the actual chart from the VA. See below to determine what your funding fee will be. https://www.benefits.va.gov/HOMELOANS/documents/docs/funding_fee_table_01012020.pdf 

The following do NOT pay the VA funding fee:

  • Veteran receiving VA compensation for a service-connected disability;
  • Veteran entitled to receive VA compensation for a service-connected disability, but receives retirement pay or active service pay;
  • Surviving spouse of a Veteran who died in active service or from a service-connected disability;
  • Service member on Active Duty who provides, on or before date of loan closing, evidence of having been awarded the Purple Heart.


2020 VA funding fee table