The VA loan has no monthly mortgage insurance. What it has instead is a one-time funding fee, paid to VA at closing. The rates are written into federal law, not set by your lender, and a large group of Veterans owe nothing at all. Here is the table as the statute prints it.
These apply to loans closed on or after April 7, 2023 and before June 9, 2034. Since 2020, Reservists and National Guard members pay the same rates as other Veterans.
| Loan | First use | Subsequent use |
|---|---|---|
| Purchase or construction, less than 5% down | 2.15% | 3.30% |
| Purchase or construction, 5% to under 10% down | 1.50% | 1.50% |
| Purchase or construction, 10% or more down | 1.25% | 1.25% |
| Cash-out refinance | 2.15% | 3.30% |
| Interest rate reduction refinance (IRRRL) | 0.50% | 0.50% |
| Loan assumption | 0.50% | 0.50% |
| Manufactured home (not IRRRL) | 1.00% | 1.00% |
The fee is a percentage of the loan amount, and the law lets it be included in the loan rather than paid in cash. On a $300,000 first-use purchase with nothing down, that is $6,450.
The statute says the fee may not be collected from:
Including those who would receive it if not for retirement or active service pay, and those rated before discharge.
Of a Veteran who died from a service-connected disability, including death in service.
Service members who provide evidence of the award on or before the closing date.
A pending disability claim is worth raising before closing. The exemption turns on the rating, so timing matters.
A first-use loan is one to a Veteran who has never had a VA-guaranteed loan. Every later VA purchase or cash-out is subsequent use, even if the first loan was paid off long ago. The one exception in the law: after a presidentially declared disaster destroys a VA-financed home, the next loan for rebuilding within three years can be treated as first use.
The law also schedules lower rates for loans closed on or after June 9, 2034. Getting your entitlement back after a sale is covered on restoration of entitlement. The IRRRL itself is explained at IRRRLs.com.
Straight from the law: 38 U.S.C. 3729, Loan fee, subsections (a) Requirement of fee, (b) loan fee table and definitions, and (c) Waiver of fee. VA may issue guidance on top of the statute. Not a commitment to lend.
Get the playbook, then get the benefit you earned. The full book is free. The wrong lender costs you a lot more.
Jason is also a mortgage broker. Questions? Call (843) 569-7283 / 843.LOW.RATE
By refinancing the consumer's existing loan, the consumer's total finance charges may be higher over the life of the loan.