What is the VA funding fee, and can the seller pay it?
Answered by Ruth Brewer, your Beale AFB PCS relocation specialist. Straight talk, no pressure, and no jargon.
Quick answer
The funding fee is a one-time VA cost that helps keep the program running, and it applies to most VA purchases unless you are exempt. VA rules allow the seller to contribute toward your closing costs and the funding fee, which Ruth builds into her negotiation strategy.
The funding fee is calculated as a percentage of your loan amount and varies with your down payment and whether it is your first use of the benefit. Some veterans are exempt, including those receiving VA disability compensation, so it is worth confirming your status before assuming the fee applies.
For buyers who do pay it, VA rules permit the seller to contribute toward your closing costs and funding fee. In the communities near Beale, Ruth treats those seller contributions as a standard part of her negotiation strategy, so your out-of-pocket cost at the closing table stays as low as it reasonably can.
The funding fee is not a penalty and not a closing cost you simply absorb. Know whether you are exempt, and let your agent negotiate the rest.
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