VA Funding fee is required for all VA loans, it’s also required by law. The VA funding fee is intended for the borrower to contribute towards the cost of this benefit, which also reduces the cost to taxpayers. For first time home buyers the Va funding fee is 2.15% of the purchase price. For second time users it is 3.30%.

The reason for a higher fee for second time users is based on the fact that these veterans have already used their VA benefit once, so they have had time to gain equity and/or save money towards a down payment.

If a down payment of 5% or more is made then the funding fee is reduced.

The VA funding fee can be either financed or paid for by cash. If it’s being financed then the fee is just added on top of the purchase price making it easier for veterans to get approved for a VA Home Loan.