The VA funding fee replaces PMI on VA loans and varies by down payment size and whether it is your first use of VA loan benefits.
Down payment
First use
Subsequent use
0-4.99%
2.15%
3.3%
5-9.99%
1.5%
1.5%
10%+
1.25%
1.25%
Why VA loans are often the best available option
VA loans allow 0% down with no PMI ever required, regardless of down payment — a combination no other loan program offers. Veterans with a service-connected disability rating are exempt from the funding fee entirely, making VA loans essentially free of the largest extra cost other zero-down programs carry.
VA vs conventional with 0% down
A conventional loan does not offer 0% down options for most borrowers, and would require PMI at higher down payment tiers. The VA funding fee is a one-time charge (often financed into the loan) versus PMI which is an ongoing monthly cost — VA is typically the cheaper path when eligible.
No. VA loans allow 0% down for eligible veterans, active-duty service members, and certain surviving spouses — one of the only major loan programs offering true zero-down financing.
What is the VA funding fee?
A one-time fee that replaces PMI on VA loans, ranging from 1.25% to 3.3% of the loan amount depending on down payment size and whether it is your first use of VA loan benefits. It can be financed into the loan.
Do VA loans require PMI?
No. VA loans never require PMI, regardless of down payment size — a unique advantage over conventional and FHA loans.
Who is exempt from the VA funding fee?
Veterans receiving VA disability compensation, and certain surviving spouses of veterans who died in service or from a service-connected disability, are exempt from the funding fee entirely.
Can I use a VA loan more than once?
Yes, VA loan benefits can generally be reused, though subsequent use typically carries a higher funding fee (unless the prior loan is paid off or you are putting down 5%+). Full entitlement often restores after a VA loan is paid off.