Nationwide Mortgage Licensing System (NMLS) Practice Exam 2026 – The Complete All-in-One Guide to Exam Success!

A VA loan requires a funding fee, which is a one-time payment made by the borrower to help offset the cost of the loan program. This fee is used to ensure that the VA loan program remains self-sustaining and continues to provide benefits to veterans and active-duty military members. Unlike other types of loans, the VA loan does not require mortgage insurance, but the funding fee helps cover potential losses to the government in cases of default.

The funding fee amount can vary based on several factors such as the borrower's military history, the size of the loan, and whether it is the borrower’s first VA loan or a subsequent one. This fee can be financed into the loan amount, meaning borrowers do not have to pay it upfront if they choose not to.

Other types of loans, such as FHA loans, do have their own types of mortgage insurance premiums, but these are not classified as funding fees. Conventional and jumbo loans have different fee structures and typically do not involve a funding fee like the VA loan does.