The direct answer
Most veterans using a VA loan in Highland, Utah pay a one-time VA funding fee. The fee is a percentage of the loan amount, and the percentage depends on whether this is a first or subsequent use, the size of any down payment, and the loan type. It can be paid in cash at closing or financed into the loan.
Some borrowers do not pay the fee at all. Veterans receiving VA compensation for a service-connected disability, certain surviving spouses, and certain active-duty Purple Heart recipients are generally exempt. The Certificate of Eligibility shows whether the exemption applies.
Executive summary
- The funding fee is a one-time charge that supports the VA loan program; it is not mortgage insurance.
- The percentage depends on first or subsequent use, down payment, and loan type.
- Most borrowers finance the fee into the loan instead of paying it in cash.
- Financing the fee raises the loan balance and the monthly payment slightly.
- Veterans with qualifying service-connected disability compensation are generally exempt.
- The exemption is verified on the Certificate of Eligibility before closing.
- A down payment of five percent or more can lower the fee percentage.
How the fee is structured
| Situation | General effect on the fee | What to confirm |
|---|---|---|
| First use, zero down | Standard first-use percentage | Current VA fee schedule |
| Subsequent use, zero down | Higher percentage than first use | Prior VA loan history on the COE |
| Five percent or more down | Lower percentage tier | Exact down-payment amount in the contract |
| Exempt borrower | No funding fee charged | Exemption shown on the COE |
| Financed vs. cash | Financing raises balance and payment | Loan estimate shows which was chosen |
Percentages are set by the VA and change from time to time. Confirm the current schedule with the U.S. Department of Veterans Affairs and your lender before relying on any figure.
What is specific to Highland
Highland's larger lots and newer custom construction often push purchase prices above county medians, which makes the funding-fee dollar amount larger even when the percentage is unchanged. Buyers building new in Highland should confirm whether the fee is being financed and how that affects the final payment before signing a construction contract.
Confirm eligibility and documents in the Highland VA eligibility guide, then review Highland entitlement before treating the fee question as settled.
Who may be exempt
The most common exemption applies to veterans who receive VA compensation for a service-connected disability. Certain surviving spouses of veterans who died in service or from a service-connected disability may also be exempt, as may active-duty service members who hold a Purple Heart. Eligibility for the exemption is not assumed — it is verified through the Certificate of Eligibility.
If a disability claim is pending near closing, ask the lender how the fee will be handled and whether a refund is possible if the exemption is later confirmed. Compare the payment difference in the VA Loan Calculator.
How Tres would evaluate this
A Highland veteran is deciding whether to finance the funding fee or pay it in cash. Tres lays out three numbers side by side: the fee amount itself, the monthly-payment difference if it is financed, and the cash the household keeps in reserve if it is financed. On Highland's higher-priced homes, financing the fee instead of paying it in cash can add a meaningful amount to the monthly payment. The decision is made only after the COE confirms whether any exemption applies.
This is an illustrative decision framework, not a description of a specific client or completed transaction.
What to verify before you decide
- Whether your Certificate of Eligibility shows a funding-fee exemption.
- Whether this is a first or subsequent use of your VA benefit.
- The current VA funding-fee percentage for your loan type and down payment.
- Whether the fee will be financed or paid in cash, as shown on the loan estimate.
- The monthly-payment difference between financing and paying the fee in cash.
- How a down payment of five percent or more would change the fee.
Verify current VA funding-fee percentages and exemption rules with the U.S. Department of Veterans Affairs and a Utah-licensed mortgage banker.
