The VA funding fee is a one time charge the Department of Veterans Affairs applies to many VA home loans to help fund the program. It can be paid up front, rolled into the loan balance, or in some cases waived for veterans with qualifying service connected disability. We explain how the fee works, how it changes your costs, and the practical choices people in Atlanta and nearby communities make when they use their VA benefit.
What the VA funding fee is
The funding fee is a one time payment tied to a VA guaranteed mortgage. It is not an ongoing insurance payment. The fee supports the VA home loan program so the department can guarantee loans with low or no down payment. Who pays the fee, and whether it is required, depends on the borrower type, the loan type, and whether the borrower has a qualifying service connected disability.
As licensed mortgage professionals we review funding fee options for every VA borrower, and we explain how the fee affects your loan amount, monthly payment, and entitlement. Ben Bell, Mortgage Broker, NMLS #1450064, partners with lenders including UMortgage to tailor financing to each client in Atlanta and surrounding communities.
Why the funding fee matters for Atlanta buyers
Local housing market conditions determine how much cash buyers bring to closing and how much they prefer to roll into the mortgage. In Atlanta, where buyers often balance price and resale considerations, the choice to pay the funding fee up front or finance it into the loan changes the loan to value, monthly payment, and flexibility for future refinancing.
For veterans and active service members, understanding entitlement, refund rules, and the fee waiver process can save time and unexpected cost at closing. We walk clients through those tradeoffs and coordinate with VA documentation requirements so the process is efficient.
Key concepts to know
- Purpose. The funding fee helps fund the VA loan program so the VA can guarantee mortgages without mortgage insurance.
- Paying the fee. You may pay the fee at closing, roll it into the loan balance, or have it waived if eligible.
- Who may be exempt. Veterans with qualifying service connected disability, or surviving spouses in certain situations, may be exempt from the fee.
- First use versus subsequent use. The fee amount depends in part on whether the borrower is using the VA entitlement for the first time on a purchase loan.
- Effect on entitlement. The fee does not change your entitlement directly, but the loan balance that uses entitlement will include the financed fee if you roll it into the mortgage.
How the funding fee is calculated and where to confirm rates
The department sets the fee, and it varies by the type of VA loan, purchase versus refinance, whether there was a down payment, and whether the borrower is a first time or subsequent user of VA entitlement. Because official rates or tables can change, check the Department of Veterans Affairs for the current funding fee schedule before you make a final decision.
We will pull the current fee table for your specific situation and show how the fee changes the loan amount and monthly payment, so you can decide what makes most sense for your goals.
Pro tip: If you are eligible for a waiver because of a service connected disability, gather the VA documentation early. That prevents delays at closing.
Options for handling the funding fee
| Option | How it works | When it is commonly chosen |
|---|---|---|
| Pay out of pocket at closing | Fee is added to closing costs, loan amount stays lower | If you want a smaller loan balance and lower monthly payment |
| Finance into the loan | Fee is added to loan principal, increasing the loan to value and monthly payment | If you prefer to preserve cash for moving, repairs, or other needs |
| Waiver | VA waives the fee for qualifying veterans with service connected disability or eligible surviving spouses | If you have VA documentation that satisfies the waiver criteria |
Common tradeoffs and what good looks like
Deciding how to handle the fee is a financial choice with three main tradeoffs.
- Cash versus cost over time. Paying the fee up front reduces interest paid over the life of the loan, but costs more at closing. Financing the fee preserves cash now but increases interest because the financed fee accrues interest.
- Refinance flexibility. If you finance the fee into the loan and later refinance to a conventional mortgage, you may recover the added cost in lower rates or different loan terms. We review refinance scenarios so you understand break even points and equity effects.
- Paperwork and timing. Waivers require VA letters and verification, which can take time. Planning ahead avoids closing delays.
Checklist for VA buyers and their mortgage broker
Before you choose how to handle the fee
- Confirm current funding fee rules and rates with the Department of Veterans Affairs.
- Gather VA documentation if you believe you qualify for a waiver.
- Ask your lender for a side by side projection showing payment and total interest if you pay the fee now versus finance it.
- Factor in cash needed for other closing costs, inspections, and moving expenses.
- Compare short term cash needs against long term payment goals.
How refinancing interacts with the funding fee
If your original VA loan included a financed funding fee, a refinance can remove that financed amount only if you choose a refinance product that pays down principal or changes the loan structure. There are refinance options specific to VA loans that affect entitlement and funding fee calculations, and we discuss those when you look at rate and term refinance or cash out refinance alternatives.
For homeowners who refinance to a conventional loan, the original VA funding fee remains as part of the loan history, but it is not a recurring VA charge. We review refinance timing, break even points, and long term cost so you make an informed choice.
Related services we provide
We guide veterans through the VA process from eligibility to closing. Relevant services include VA purchase loans and refinance options. Learn more about VA purchase loans on our VA home loans page, or about how we serve as a mortgage broker on our Mortgage Broker page. If you are considering refinancing to change how the funding fee affects your loan, our Refinance page explains options. For questions about eligibility that affect fee waivers, review the VA Loan Eligibility topic on our site. To understand how the funding fee fits into broader costs, see our Mortgage Costs Breakdown topic.
VA home loans, Mortgage Broker services, Refinance options, VA loan eligibility, Mortgage costs breakdown
Related locations we serve
We work with veterans and homebuyers across the Atlanta metropolitan area and surrounding communities. Our local market knowledge helps when comparing offers, estimating closing costs, and timing closings in neighborhoods across the metro area.
Ben Bell, Mortgage Broker, NMLS #1450064, coordinates with lenders and title companies to keep documentation moving smoothly for buyers in Atlanta and nearby cities.
Helpful external resources
For authoritative rules and the current funding fee schedule, consult the Department of Veterans Affairs funding fee information. We also reference official VA guidance on eligibility and waiver documentation when we prepare files for submission.
We link to official VA resources when we share rate or fee tables because those pages contain the authoritative, current numbers that govern funding fee calculation.
Key takeaway
The VA funding fee is a one time charge that affects cash to close and loan balance. It can be paid up front, financed into the mortgage, or waived in qualifying cases. As licensed mortgage professionals we walk through the numbers and VA documentation so you choose the option that fits your financial goals.
Frequently asked questions
Can the VA funding fee be waived?
The VA will waive the funding fee for veterans with qualifying service connected disability and for some surviving spouses, when the required VA documentation is provided. We collect the necessary letters and coordinate with the lender so the waiver, when applicable, is applied before closing.
Can I finance the funding fee into my VA loan?
Yes. The funding fee may be rolled into the loan amount. Financing the fee increases the loan principal and affects the monthly payment and interest paid over time. We run payment comparisons so you can see the short term and long term impact.
Does the funding fee apply to VA refinance loans?
Some VA refinance products include a funding fee and others have different fee structures. The amount and applicability depend on whether the refinance is a rate term or a cash out refinance, and whether the borrower has prior use of entitlement. We review the specific refinance program to show how a funding fee would apply.
Where do I find the exact funding fee rates?
The Department of Veterans Affairs publishes the official funding fee schedule. Because rates and tables can be updated, we check the VA site and use the current table when preparing a loan estimate or final closing figures.
What documentation is needed for a funding fee waiver?
Waivers require official VA documentation that shows service connected disability or other qualifying status. We help clients obtain the correct VA letters and submit them to the lender and closing agent to prevent delays.
Learn more and check our profile
For more reading, view related topics on our site and our VA home loan service page. You can also review our Google Business Profile to read client reviews and get directions to our office in Atlanta.