What factor determines the VA funding fee?

The VA funding fee is primarily determined by the details of service of the borrower. This includes factors such as the type of military service, whether the borrower has had prior use of a VA loan, and the amount of the down payment. Specifically, the fee is structured to vary based on whether the individual is active duty, a veteran, a reservist, or a National Guard member, as well as whether it's their first time using a VA loan or a subsequent use.

While the other factors, such as the value of the home, amount of loan insurance, and military rank may influence various considerations in a loan process, they do not directly affect the calculation of the VA funding fee. The funding fee serves both as a means to help sustain the VA loan program and to offset some of the costs for taxpayers, rather than being based on the home's value or the borrower's rank.