---
title: "VA Funding Fee: Finance vs Pay Cash | Ondo Real Estate | Ondo RE"
canonical: https://www.ondorealestate.com/blog/va-funding-fee-finance-vs-pay-cash/
---

# VA Funding Fee: Finance vs Pay Cash

Financing the fee raises the loan. Paying cash raises cash to close. Run both.

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Most VA purchases include a funding fee unless an exemption applies. You can often finance it into the loan or pay it in cash at closing. That is a cash-to-close versus loan-size tradeoff, not a trick to erase the fee. Dollar figures on education pages are worked examples for illustration. They are not your payment, cash to close, or an offer of credit. Snapshot as of 2026-08 (VA funding fee schedule (confirm on va.gov before quoting)).

## Snapshot percents (confirm before anyone quotes)

- First use, less than 5% down: 2.15%
- Subsequent use, less than 5% down: 3.30%
- First use, 5% to less than 10% down: 1.50%
- First use, 10% or more down: 1.25%
The funding fee is typically waived for veterans with a qualifying service-connected disability rating and for some surviving spouses. Entitlement and occupancy rules also apply. Zero down is available only with remaining entitlement and when the loan otherwise meets VA and lender guidelines. It is not automatic for every veteran.

## Illustration: finance vs cash on a $450,000 purchase

Assume first-use, less than 5% down, at the 2.15% snapshot, zero down, and that the schedule still applies. Fee ≈ $9,675.

- **Finance the fee.** Loan amount ≈ $459,675. Monthly principal and interest is calculated on the higher balance. Cash to close is mostly closing costs and prepaids.
- **Pay the fee in cash.** Loan stays ≈ $450,000. Cash to close rises by about the fee plus the same costs and prepaids.
Compare those two shapes on a Loan Estimate, not this paragraph. Use the [payment calculator](/calculators/mortgage-payment/) only as an illustration.

## What happens next

Confirm exemption status and the current VA schedule. Then read [remaining entitlement](/blog/va-entitlement-second-va-loan/) if you already have a VA loan, and [the VA program page](/loans/va/) for occupancy and COE.

## Common questions

### Is the funding fee always charged?

### If I finance the fee, do I still pay it?

## Keep going

[VA home loans in Utah Zero-down eligibility, funding fee, COE, and Utah military context. For eligible veterans and service members.](/loans/va/)[Can I Use VA If I Still Have a VA Loan? Remaining entitlement, occupancy, and restoration — how a second VA purchase is underwritten when you have not sold the first home.](/blog/va-entitlement-second-va-loan/)[VA Residual Income vs DTI VA residual income is cash left after PITI and debts. It can fail when DTI looks fine, and pass when DTI looks high. How the test works.](/blog/va-residual-income-vs-dti/)[Mortgage payment calculator Principal, interest, and optional taxes, insurance, and PMI. Not a quote.](/calculators/mortgage-payment/)[Start a mortgage conversation What you will be asked, and what a conversation will not promise. This is not an instant approval, a lock, or a commitment to lend.](/qualify/)

## What to do next

Education first. A conversation with a loan officer is how you find out what may actually fit your file.

[Ask about VA eligibility](/qualify/)[VA home loans in Utah](/loans/va/)[Mortgage payment calculator](/calculators/mortgage-payment/)

Loan information is provided by Ondo Real Estate (NMLS ID on file). This is not a commitment to lend, a loan approval, or an offer of credit. Rates, terms, and payments shown are estimates for illustration only, are not a quote, and are subject to credit approval, underwriting, and market conditions. You are not required to use Ondo for financing to buy or sell with Ondo. Equal Housing Lender. Program rules, fees, and county loan limits change. Confirm the current published schedule and lender overlays. Nothing here is a quote, a lock, or a credit decision. [Licensing and disclosures](/licensing/)