Yes! The VA funding fee can be included in your VA loan, allowing you to reduce upfront costs. This one-time charge helps sustain the VA loan program and is required for most borrowers.
Pros & Cons of Rolling the VA Funding Fee Into Your Mortgage
✅ Benefits:
- Lowers Upfront Expenses: Keeps more cash in your pocket for moving, home improvements, or savings.
- No Immediate Out-of-Pocket Payment: Avoids a large closing cost by adding the required fee to your loan balance.
⚠️ Drawbacks:
- Increases Loan Balance: Since the VA funding fee charge is added to your mortgage, your total loan amount will be higher.
- More Interest Paid Over Time: Because it’s financed, you’ll pay interest on it throughout the life of the loan.
Think Long-Term: Your BAH Is an Investment in Your Future
If you’re concerned about affording the VA funding fee at closing, remember this: your BAH (Basic Allowance for Housing) is already covering your housing—why not use it to build equity instead of paying rent?
By using your VA home loan, you’re turning your BAH into an investment, rather than giving that money to a landlord. Financing the required fee into your loan helps keep cash in hand while still allowing you to benefit from homeownership, equity growth, and financial stability.
💡 Is It Right for You?
If you want to keep closing costs low, financing the funding charge might be a smart choice. However, if you want to pay less in interest, consider covering the fee upfront.
For a breakdown of the latest VA loan fee rates, check out our FAQ on VA Funding Fee Rates.
📌 For the most up-to-date information on VA loan fees and exemptions, visit the VA Lenders Handbook – VA Pamphlet 26-7. Click Chapter 8 for full guidance on borrower fees.