VA Funding Fee Virginia Beach: What Military Buyers Need to Know

By Megan Luker  |  Virginia Beach & Hampton Roads Military Relocation Expert

If you are PCSing to Virginia Beach, Norfolk, Portsmouth, Chesapeake, or anywhere across Virginia Beach and Hampton Roads, one number on your loan estimate can catch you off guard fast: the VA funding fee. Here is what many military buyers miss — some eligible buyers may pay zero, and others may be able to reduce their cash out of pocket with better planning. The goal is not just to use your VA loan benefit. The goal is to use it well.

What Is the VA Funding Fee?

The VA funding fee is a one-time government fee charged on many VA-backed home loans. It does not go to the lender. According to the U.S. Department of Veterans Affairs, the fee helps lower the cost of the VA loan program because VA loans do not require a down payment or monthly mortgage insurance. That is why the VA loan remains such a powerful tool for military buyers, especially during a PCS move. See what the VA funding fee is and where it goes at 2:45.

A VA loan may offer zero down payment options, no monthly mortgage insurance, flexible qualifying guidelines, competitive loan terms, and the ability in many cases to finance the funding fee instead of paying it up front. For buyers moving into a competitive market like Virginia Beach and Hampton Roads, that flexibility matters.

What Does the VA Funding Fee Cost?

The amount depends on whether this is your first VA loan use, whether you have used the benefit before, how much money you put down, and the type of VA loan. For VA-backed purchase loans, here are the funding fee rates:

On a $400,000 purchase with zero down, a first-use VA funding fee at 2.15% would be $8,600. Many buyers finance that amount into the loan, but it still affects the total loan balance and monthly payment. That is why this deserves attention before you are sitting at the closing table. See the full 2026 percentage breakdown by use and down payment at 4:30.

Who May Pay Zero VA Funding Fee?

This is where military buyers can leave real money on the table. According to the VA, some borrowers may be exempt from the VA funding fee — including eligible borrowers who receive VA disability compensation, are eligible for compensation but receive retirement pay instead, are active-duty service members with a Purple Heart before closing, or are qualifying surviving spouses.

Ask your lender early whether your exemption status is reflected correctly on your Certificate of Eligibility. If your COE does not properly show your exempt status before closing, you may be charged a fee you did not need to pay. For PCS families, timing is everything — do not wait until the final loan estimate to sort this out. See how to pay zero — exemptions fully explained — at 6:15.

Why the COE Matters Before You Start Shopping

Your VA home loan Certificate of Eligibility confirms whether you qualify for a VA-backed home loan benefit. Buyers can request a COE online, through a lender, or by mail. For PCS buyers, this should happen early — before you fall in love with a home near NAS Oceana, Naval Station Norfolk, JEB Little Creek-Fort Story, Dam Neck Annex, or Naval Medical Center Portsmouth.

Your lender should know whether you are exempt from the funding fee, whether this is your first or subsequent use, whether you have remaining entitlement, whether seller concessions may help your strategy, and whether your disability income can be considered in qualifying. That is the difference between shopping with a guess and shopping with a plan.

VA Loan Strategies Many Buyers Miss

See the 6 VA loan hacks most agents never tell you at 10:45.

Seller Concessions May Help

In some situations, sellers may contribute toward buyer costs. Depending on the structure of the offer and lender guidelines, seller concessions may help with closing costs, prepaid expenses, or other allowable items. This does not mean every seller will agree, and not every market supports aggressive concession requests. But in the right property at the right price, with the right structure, this can reduce cash out of pocket.

Disability Income May Affect Qualifying

VA disability income is generally tax-free. Some lenders may "gross up" that income for qualifying purposes, which can improve the buyer's debt-to-income picture. This is lender-specific, so military buyers should ask early instead of assuming every lender handles it the same way.

VA Loans Do Not Have Prepayment Penalties

VA loans generally do not penalize borrowers for paying off the loan early. That can matter if your PCS timeline changes, you refinance later, or you decide to sell sooner than expected.

You May Be Able to Reuse Your VA Benefit

The VA loan is not automatically a one-and-done benefit. Some buyers may restore entitlement after selling or paying off a prior VA loan. Others may be able to use remaining entitlement while keeping a previous property, depending on the numbers and lender approval. This is where a strong VA-experienced lender matters.

The 2026 Tax Question: Ask Before You Assume

Some buyers hear that the VA funding fee may be deductible on federal taxes. Here is the safe answer: do not assume. Tax rules change, and your situation may depend on current IRS rules, income limits, itemization, and how the fee is handled. Use the IRS website as a starting point and confirm with a CPA or qualified tax professional before making decisions based on a deduction. See the new 2026 IRS/VA tax deduction update at 8:00.

Why This Matters for PCS Buyers in Virginia Beach and Hampton Roads

In Virginia Beach and Hampton Roads, financing strategy and location strategy are connected. A home that looks affordable on paper may not work if the commute is rough, the bridge-tunnel route is unpredictable, or the base access adds stress every morning. Use 511 Virginia or VDOT to check traffic patterns, tunnels, incidents, and real-time commute conditions before committing to a neighborhood. In Virginia Beach and Hampton Roads, miles do not always equal minutes. See the honest take on whether the VA loan is still worth it at 15:00.

Base-Specific Reality Check

NAS Oceana and Dam Neck Annex

If you are stationed at NAS Oceana or Dam Neck Annex, Virginia Beach can be very convenient — but noise tolerance, school fit, flood considerations, and budget all matter. NAS Oceana is the Navy's East Coast Master Jet Base, so buyers should understand jet noise patterns before choosing a neighborhood.

Naval Station Norfolk

If you are assigned to Naval Station Norfolk — the largest naval complex in the world — do not choose a home based only on map distance. Gate traffic, tunnel routes, and peak commute times can change how a home actually lives day to day.

JEB Little Creek-Fort Story

For buyers connected to JEB Little Creek-Fort Story, both the Little Creek and Fort Story sides matter. Depending on lifestyle goals, buyers may compare Shore Drive, Chic's Beach, Great Neck, Oceanfront-adjacent areas, and parts of Norfolk.

Naval Medical Center Portsmouth

For buyers assigned to Naval Medical Center Portsmouth, Portsmouth, Chesapeake, Norfolk, and parts of Virginia Beach may all come into play. The key is understanding tunnel exposure, bridge patterns, and whether the lower payment in one area is worth the commute trade-off.

FAQ: VA Funding Fee and PCS Buying in Virginia Beach

Can the VA funding fee be rolled into the loan?

In many cases, yes. The VA notes that the funding fee can often be financed into the loan instead of being paid up front — but it still affects the total loan balance and monthly payment.

Do all VA buyers pay the funding fee?

No. Some buyers may be exempt, including certain veterans receiving VA disability compensation, eligible Purple Heart recipients, and qualifying surviving spouses. Always confirm exemption status with your lender and COE before you start shopping.

Should I still use a VA loan if I am not exempt?

Often, yes — but it depends on your situation. The VA loan may still be strong because it can offer zero down payment, no monthly mortgage insurance, and flexible qualifying. Compare the full cost with other loan options with a VA-experienced lender.

Is the VA funding fee tax-deductible in 2026?

Do not assume. Tax rules can change, and your personal situation matters. Confirm with a CPA or qualified tax professional using current IRS guidance before making decisions based on a potential deduction.

Is it better to put money down to reduce the funding fee?

Sometimes. A larger down payment may reduce the funding fee percentage, but that does not automatically make it the best move. PCS buyers also need cash reserves for moving costs, repairs, inspections, and life after closing.

What should I do before shopping for homes in Virginia Beach?

Get your COE reviewed, confirm your funding fee status, talk with a VA-experienced lender, and build your home search around your base, commute, school needs, and real monthly comfort — not just the list price.

If you want your next PCS move to be truly seamless, download my free Military Relocation Guide — or book a Zoom call with me and we'll talk through your VA loan situation, your BAH rate, and the neighborhoods that actually make sense for your family.

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