The funding fee is required by law and is charged by the Department of Veterans Affairs, not the lender. In most cases the funding fee is added on to your loan amount and is not paid out of pocket by the Veteran borrower. The amount of the funding fee varies depending on whether the mortgage is the Veteran borrower’s first and/or if there is any down payment on the property. A VA Specialist can help to determine what the exact funding fee will be for each borrower. Also, Veterans who are rated for disability and surviving spouses are exempt from the funding fee.