A basic funding fee of 2 percent must be paid to the VA (Veterans' Administration) by all but certain exempt veterans. A down payment of 5 percent or more will reduce the fee to 1.5 percent. A 10 percent down payment will reduce the fee to 1.25 percent.

A funding fee of 2.75 percent must be paid by all eligible Reserve/National Guard individuals. A down payment of 5 percent or more will reduce the fee to 2.25 percent. A 10 percent down payment will reduce it to 2 percent.

The funding fee for loans to refinance an existing VA home loan with a new VA home loan to lower the existing interest rate is 0.5 percent.

Veterans who are using entitlement for a second or subsequent time, who do not make a down payment of at least 5 percent, are charged a funding fee of 3 percent.

NOTE: For all VA home loans, the funding fee may be paid in cash or it may be included in the loan.

In addition, reasonable closing costs may be charged by the mortage company. These costs may not be included in the loan. The following items may be paid by the veteran purchaser, the seller, or shared. Closing costs may vary among mortgage companies, and also throughout the nation, because of differing local laws and customs.

No commissions, brokerage fees or "buyer broker" fees may be charged to the veteran buyer.

Nathan Toler is Vice-President of Internet Operations for Sharp Mortgage Group, a zero-down home mortgage specialist. Click here for more about VA home loans and mortgage rates for Virginia.