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The VA Funding Fee ranges from 2.15% to 3.3% of the loan amount on purchases and .5% to 3.3% of the loan amount on refinances. The following table breaks down how the VA Funding Fee is determined.
Simply put, the funding fee is a cost associated with obtaining a VA loan. Because VA loans are paid for both by the government and taxpayer dollars, the funding fee helps to offset the cost of administering the loan.