Do You Have to Pay PMI on a VA Loan?When you're buying your first home, every dollar counts. One cost that surprises many homebuyers is Private Mortgage Insurance (PMI)—a fee that can add hundreds of dollars to your monthly mortgage. But if you qualify for a VA loan, there’s good news: you don’t have to pay PMI at all.
In this article, we'll explain why VA loans don’t require PMI, how this benefit can save you money, and how Loan Factory helps you take advantage of all the benefits VA loans offer.
→ Read more: VA Purchase Loan: What Most Veterans Don’t Know
What is PMI, and Why Do Most Borrowers Pay It?
Private Mortgage Insurance (PMI) is a monthly fee required by most lenders when a borrower puts down less than 20% on a conventional mortgage. PMI protects the lender if a borrower defaults, but it offers no benefit to the homeowner.
According to the Consumer Financial Protection Bureau (CFPB), PMI can cost 0.5% to 1.5% of the loan amount annually, depending on your credit score and down payment size [CFPB].
You Do Not Have to Pay PMI on a VA LoanNo, you do not. One of the best features of a VA loan is that there is no PMI requirement ever.
This is because VA loans are backed by the U.S. Department of Veterans Affairs (VA), which guarantees a portion of the loan. This government guarantee eliminates the need for private mortgage insurance.
According to the VA’s official website, “VA loans do not require private mortgage insurance (PMI) or mortgage insurance premiums (MIP)” [VA.gov].
How Much Can You Save Without PMI?
Let’s say you buy a $400,000 home with a 5% down payment on a conventional loan. You could pay $150 to $300 per month in PMI. That’s $1,800 to $3,600 per year.
With a VA home loan, you keep that money in your pocket, month after month.
Other Key VA Loan Benefits
Key VA Loan BenefitsThe VA loan program is designed to make homeownership more accessible for veterans, active-duty service members, and eligible surviving spouses. Some of the top benefits include:
How Loan Factory Helps You Maximize VA Loan Benefits
How Loan Factory Helps You Maximize VA Loan BenefitsAt Loan Factory, we specialize in helping first-time buyers and veterans navigate the mortgage process with ease. Here's how we help you save more and close faster:
Low Interest Rates from 240+ Lenders
We shop rates from more than 240 lenders nationwide to secure the lowest possible rates for you.
Down Payment Assistance Programs
Even though VA loans don’t require a down payment, you may qualify for additional state or local assistance programs to help with closing costs or other expenses.
No Hidden Fees
Loan Factory believes in transparent pricing. We clearly explain every fee and cost, so you understand exactly what you’re paying.
Fast Pre-Approvals
Our AI-powered online application lets you get pre-approved in minutes, so you can shop for your home with confidence.
Personalized Loan Matching
Every borrower is unique. We help you choose the right loan product with the most affordable terms, whether it’s a VA loan or another program.
Expert Guidance Every Step of the Way
Our experienced loan officers will answer your questions, explain your options, and support you through every step of the homebuying process.
→ Read more: Find the Best VA Loan Officers Near Me
Your Dream Home is Closer Than You Think
At Loan Factory, we’re not just about mortgages. We’re about helping people achieve the dream of homeownership. Whether you’re a first-time buyer or a veteran exploring your options, we’re here to help you save time and money.
Get Started Today
Loan Factory VA Loan Reviews- Visit our website to learn more and start your application: www.LoanFactory.com
- Or call us directly to speak with one of our expert loan officers: (714) 444-9999
Loan Factory – Helping You Find the Right Loan, with the Lowest Rates and No Surprises.
FAQs of Paying PMI on a VA Loan
FAQs of Paying PMI on a VA LoanDo I have to pay PMI on a VA loan?
No, you do not have to pay Private Mortgage Insurance (PMI) on a VA loan. This is a significant benefit of the program, as PMI is typically required on conventional loans with a down payment of less than 20%.
What is the VA funding fee?
The VA funding fee is a one-time fee paid to the Department of Veterans Affairs. This fee helps to keep the VA home loan program running for future generations of service members and veterans by offsetting the costs of the program to taxpayers.
How much is the VA funding fee?
The VA funding fee is a percentage of the loan amount and varies based on several factors, including your down payment amount, whether you are a first-time or subsequent user of the VA loan benefit, and the type of loan you are getting. For 2025, the fee for a first-time user with no down payment is 2.15% of the loan amount.
Is anyone exempt from the VA funding fee?
Yes, certain veterans, service members, and surviving spouses are exempt from paying the VA funding fee. This typically includes those receiving VA disability compensation, Purple Heart recipients on active duty, and certain surviving spouses.
Can I avoid paying the VA funding fee?
Besides being exempt, you can't completely avoid the VA funding fee if you are required to pay it. However, you can often roll the fee into your total loan amount, which means you won't have to pay it out of pocket at closing. Additionally, in some cases, you may be able to negotiate for the seller to pay the fee as part of your purchase agreement.
→ Read more: What to ask a mortgage loan officer?
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Disclaimer: This blog post is intended for informational purposes only and should not be considered financial or legal advice. Please consult with a qualified financial advisor and mortgage professional to understand your specific situation and make informed decisions.
