Map every source and use of funds.
A qualifying VA purchase may allow no down payment when entitlement, price, value, and lender rules support it. That does not erase every other expense. Closing costs, prepaid items, deposits, and a value gap can still affect the cash needed.
Start with the Loan Estimate. Later, use the Closing Disclosure to track borrower funds, paid deposits, approved credits, financed items, and the final amount due. The general cash-to-close guide explains the full calculation.
Important: REV Mortgage is not affiliated with or endorsed by the U.S. Department of Veterans Affairs or any other government agency.
Current VA funding-fee rates
The VA funding fee is a one-time program fee unless the borrower is exempt. According to the current VA table, the rates below have applied since April 7, 2023. Purchase rates vary by down payment and whether this is the borrower's first or later use. Percentages apply to loan amount.
| VA loan type | First use | After first use |
|---|---|---|
| Purchase or construction, less than 5% down | 2.15% | 3.30% |
| Purchase or construction, 5% or more down | 1.50% | 1.50% |
| Purchase or construction, 10% or more down | 1.25% | 1.25% |
| VA-backed cash-out refinance | 2.15% | 3.30% |
| IRRRL | 0.50% | 0.50% |
| VA loan assumption | 0.50% | 0.50% |
Other loan categories use other rates. A past manufactured-home-only use can also receive special first-use treatment. Confirm the rate and use status for the actual file rather than choosing a table row on your own.
Funding-fee exemptions are status-specific.
Some borrowers are exempt. VA's list includes certain people who receive compensation for a service-connected disability, as well as people entitled to that compensation who receive retirement or active-duty pay instead. It also covers certain surviving spouses receiving Dependency and Indemnity Compensation, some qualifying pre-discharge ratings, and active-duty Purple Heart recipients who provide the required proof by closing. Because each status has rules, ask VA or the lender to confirm it.
Your COE may show the funding-fee status. Questions can still require VA review. A later disability award may support a refund only if its effective date reaches back to before closing and the other VA rules are met. Never assume an exemption or refund before confirmation.
Financing the fee changes the loan balance.
Borrowers may pay the funding fee at closing or include it in the loan. Financing reduces the cash due for that fee, but it raises the principal balance, and interest may accrue on the added amount. For a purchase or construction-permanent loan, this rule allows only the funding fee to be financed. It does not cover every closing cost.
Closing costs and prepaid items are separate categories.
Closing costs and prepaid items are not the same.
Possible charges include lender fees, discount points, credit services, the VA appraisal, title and settlement work, recording, and taxes. Prepaid items can include homeowners insurance, daily interest, and the first escrow deposit. Who may pay each item depends on VA rules, lender disclosures, the contract, and the transaction. See the Texas closing-cost guide. A rough percentage cannot replace a Loan Estimate for the actual borrower, property, loan, providers, and closing date.
Ordinary closing-cost credits are not the same as 4% concessions.
Ordinary closing-cost credits have no VA percentage cap, according to VA. Seller concessions are a different category and are limited to 4% of the home's reasonable value shown on the Notice of Value. Examples include paying the VA funding fee, a buyer debt, or the buyer's hazard insurance in advance. Every credit still must be allowed, documented, and no larger than the related cost or limit. The lender and contract must classify it correctly.
So, a 4% allowance does not mean the seller can pay every buyer expense.
Zero down and zero cash describe different things.
Zero down and zero cash are different.
Even without a required down payment, you may need funds for closing costs, prepaid items, escrow, inspections, earnest money or option fees paid earlier, a gap between price and appraised value, or another required item. Some deposits may return as a credit at closing. Only the final settlement figures show the result. For contract and negotiation planning, see Velvet Realty Group's homebuying resource. Velvet Realty Group, brokered by LPT Realty, LLC, is separate from REV Mortgage. Readers may choose any brokerage and any lender. Using one is not required to use the other.
Official sources used for this guide
Rates and rules can change. These sources were reviewed on . Confirm the current fee status, charges, credits, and cash to close for the actual transaction.
- VA: Funding fee and loan closing costsCurrent rate table, exemptions, fee financing, negotiable costs, seller credits, concessions, and purchase-loan financing limits. Reviewed July 20, 2026.
- VA: Purchase loanNo-down-payment conditions, mortgage-insurance treatment, closing-cost context, and eligible uses. Reviewed July 20, 2026.
- CFPB: Explore the Loan EstimateOfficial consumer guidance for reviewing estimated loan terms and closing costs. Reviewed July 20, 2026.
Information reviewed : Official sources for VA fees, current percentages, and cost classifications were checked for this guide. This page provides general education. It is not a quote, Loan Estimate, loan approval, commitment to lend, tax advice, legal advice, or real estate advice.