VA Loan Down Payment and Funding Fee
Many eligible veterans and service members can buy a primary home with no down payment. The VA funding fee and closing costs are the pieces people usually misunderstand.
Do VA loans require a down payment?
Often no, if you have full entitlement and the loan amount fits lender and VA guidelines. A down payment can still help if entitlement is partial, the price is high, or you want a smaller loan.
What the funding fee is
The VA funding fee is a one-time charge that helps keep the program going. The percentage depends on down payment, first-use vs subsequent use, and loan type. It can often be financed into the loan instead of paid in cash.
Some borrowers are exempt, including many veterans receiving VA disability compensation. Exemption is worth confirming before you compare cash to close.
What you still need at closing
Zero down does not mean zero cash. Plan for:
- •Closing costs and prepaid items unless the seller or lender credit covers them
- •Earnest money during the contract, which is usually credited back
- •A home that meets VA appraisal and occupancy rules
Estimate a monthly payment
$300,000
6.5%
30 years
Frequently asked questions
Is there PMI on a VA loan?
VA loans do not use monthly private mortgage insurance. The funding fee is separate and may be financed or exempted.
Can I use a VA loan more than once?
Yes, in many cases. Remaining entitlement and whether a prior VA loan is paid off determine how much $0-down capacity you have left.
Does the funding fee change if I put money down?
Yes. A down payment can lower the funding fee percentage on a purchase. Whether that is worth it depends on your cash and monthly payment goals.
Can I refinance a VA loan?
Yes. Options can include a VA IRRRL (streamline) or a cash-out refinance, each with different documentation and fee rules.