VA charges the veteran to guarantee the loan, and by so doing, makes it possible to obtain what are arguably the more favorable terms than any other type loan. There is some confusion about the cost, however. Here's the way it works: If you pay 10% or more downpayment, there is a one-time fee of 1.25%; 5% down 1.5% (EVEN IF YOU HAVE USED YOUR VA BEFORE ); less than 5% down, 2% - unless you have used your VA before, then it's 3%. To reiterate, if you make a 5% or more downpayment, then the Fee is the same whether you have used your VA or not (Note: if your eligibility is based upon reserve duty, then add .75% to the above figures, to a maximum of 3%.). If you receive any VA disability income at all - even 10% - you are exempt from the Funding Fee.