VA Joint Loan Funding Fee Calculation: Two Eligible Veterans, Exempt Status, and Mixed Eligibility
For joint VA loans, the funding fee is computed on each borrower’s share of the total loan, then added together. Two eligible Veterans split the amount equally unless an unequal split is documented. Exempt Veterans pay no fee on their portion. In mixed eligibility, only the Veteran’s share is guaranteed and only that portion is charged a VA funding fee.
Quick Facts
- Two eligible Veterans, split the loan amount, apply each Veteran’s applicable rate, then add the results.
- Mixed eligibility, only the Veteran’s portion is guaranteed, only that portion is assessed a VA funding fee.
- Exempt Veterans owe zero funding fee on their share, the co borrower’s status controls their own share.
- First use versus subsequent use and down payment tiers change the percentage applied to each share.
- Certificates of Eligibility show exemption status, confirm accuracy with your lender before underwriting.
Mini FAQ
How do two eligible Veterans pay the funding fee
The lender splits the loan amount equally between the two Veterans unless a different allocation is documented. Each Veteran’s applicable rate is applied to their half, based on first or subsequent use and any down payment tier. Those two results are added to determine the total fee due.
What happens if one Veteran is exempt
The exempt Veteran pays no funding fee on their share. The other Veteran still pays a fee on their portion using the correct percentage for first or subsequent use and any down payment tier. The lender tallies only the non exempt share’s fee into closing costs.
How are mixed eligibility loans handled
When an eligible Veteran borrows with a non Veteran, the VA guarantees only the Veteran’s portion. The funding fee is charged only on that share. Lenders often require a down payment on the non Veteran share, because that portion is not VA guaranteed for loss protection.
Key Takeaways
- Funding fees are calculated per borrower share, then summed, not on the full loan indiscriminately.
- Two eligible Veterans split equally unless documented otherwise in underwriting and title allocations.
- Exempt Veterans owe nothing on their portion, the co borrower’s fee stands on its own.
- Mixed eligibility loans charge a fee only on the Veteran share, not the non Veteran share.
- Down payment tiers and prior use status change each borrower’s percentage and total cost materially.
- Confirm exemption on the Certificate of Eligibility early to prevent last minute closing revisions.
How does the VA funding fee work on a joint loan?
Each borrower’s fee is calculated on their share of the loan, then the lender adds the two results. Two eligible Veterans generally split the loan equally for fee purposes unless documentation shows another allocation, while mixed eligibility loans assess a fee only on the guaranteed Veteran share. Exempt Veterans do not pay a fee on their portion.
- When two eligible Veterans borrow together, the lender applies the correct percentage to each half of the loan amount, based on first or subsequent use and any down payment tier that applies to that specific Veteran’s situation and election.
- In mixed eligibility loans, the VA guarantees only the eligible Veteran’s portion, so the funding fee calculation applies only to that share, while lenders typically manage the unguaranteed portion with overlays such as required down payments or reserve requirements.
- Exemption status is indicated on the Certificate of Eligibility, which your lender pulls directly, that status controls whether a funding fee is owed on the exempt Veteran’s portion, regardless of the co borrower’s eligibility or payment obligation on their share.
- Confirm borrower eligibility and exemption through Certificates of Eligibility, then document ownership and liability allocations so the lender can apply the correct percentage to the correct shares for precise fee math.
- Determine first or subsequent use for each eligible Veteran and identify any down payment tier that reduces the applicable percentage, since tiered percentages can change the combined fee outcome significantly.
- Review the preliminary fee worksheet with your loan officer to ensure the shares, exemptions, and percentages are correct before disclosures and closing cost estimates are finalized for underwriting.
The VA explains funding fee rules, percentages, and exemption criteria in its public guidance for borrowers and lenders, which your lender uses to structure joint fee calculations accurately and consistently. VA funding fee and closing costs.
Explore VA Funding Fee Resources
These articles cover costs, exemptions, refunds, deductions, and smart ways to handle the VA funding fee at closing.- VA Funding Fee: Complete Guide — Who pays, how it’s calculated, key examples.
- Disabled Veterans: VA Funding Fee Exemption — Eligibility by rating and required documents.
- VA Funding Fee Refund: How It Works — When refunds apply and how to request.
- Surviving Spouses: Funding Fee Exemptions — Qualifying cases, proof, and application steps.
- Is the VA Funding Fee Tax-Deductible? — When deductible and where it appears.
- Can the Seller Pay the VA Funding Fee? — Concession rules, 4% cap, negotiation tips.
- Finance the Funding Fee or Pay at Closing? — Compare total cost and cash flow.
Which joint borrower scenarios change the funding fee math?
Two eligible Veterans, mixed eligibility, and exempt status each change the calculation. Two eligible Veterans split the loan and each pays based on their own rate, a mixed eligibility pair pays a fee only on the guaranteed Veteran share, and exemptions reduce that share’s fee to zero while leaving the other share unchanged.
- Two eligible Veterans can have different rates if one is a first time user and the other has used benefits before, which means each half of the loan is multiplied by a different percentage and summed to a single total fee amount.
- A mixed eligibility loan applies the VA funding fee only to the eligible Veteran’s portion, while lenders often ask the non Veteran to make a down payment on their portion to offset risk, particularly at higher loan amounts or tighter credit files.
- When one Veteran is exempt and the other is not, only the non exempt share generates a fee, so the lender removes the exempt amount from the calculation entirely and discloses a single share fee on closing documents.
| Scenario | Guaranteed share | Who pays a fee | Notes |
|---|---|---|---|
| Two eligible Veterans | Both shares | Both Veterans, based on each rate | Split equally unless documented otherwise |
| Mixed eligibility, Veteran and non Veteran | Veteran share only | Veteran share only | Lender may require down payment on non Veteran share |
| One Veteran exempt, one Veteran non exempt | Both shares | Non exempt share only | Exempt share fee is zero by policy |
| Unequal share allocation | Based on documentation | Each pays on their documented share | Requires clear title and underwriting documentation |
- Identify which scenario applies, then set the guaranteed share and the fee obligation accordingly so you can quote the correct combined amount early in the process.
- Assign rates to each eligible Veteran based on first or subsequent use and down payment tier, then multiply each share and add them together to reach a precise total.
- Document any unequal allocations clearly in title and underwriting, since undocumented changes default the calculation back to equal halves in most lender workflows.
How do you calculate each borrower’s funding fee step by step?
Split the loan amount by shares, apply the correct percentage to each share, then add the results. The percentage depends on first or subsequent use and down payment tier for that borrower. Exempt status sets the applicable percentage to zero on that share, which reduces the summed total materially.
- Percentages differ by first use versus subsequent use, and many lenders model a few down payment tiers so you can see whether a small cash amount lowers the combined fee more than it costs in upfront funds at closing day.
- Most joint loans use equal shares for fee math, but if your ownership split is not fifty fifty, the lender needs documentation so the calculations match the actual allocation of liability and entitlement across the borrowers accurately.
- Fee totals are independent of interest rate, so calculate the fee first, then compare whether paying the fee in cash, rolling it into the loan, or slightly increasing a down payment creates the best overall payment and equity position.
| Worked example | Share | Rate | Share amount | Fee result |
|---|---|---|---|---|
| Veteran A, first use, no down payment | 50% | 2.15% | $100,000 | $2,150 |
| Veteran B, subsequent use, no down payment | 50% | 3.30% | $100,000 | $3,300 |
| Total funding fee | — | — | $200,000 | $5,450 |
- Confirm first or subsequent use for each Veteran and whether any down payment tier applies, then set the correct rate for each share before performing calculations to avoid re disclosures later.
- Multiply each share by the applicable percentage and round according to lender policy, then add the results and decide whether to finance the fee or pay in cash at closing.
- Recalculate when facts change, such as one borrower becoming exempt, a down payment increase, or a revised ownership split, since small changes can materially reduce the total fee obligation.
What happens when one Veteran is exempt and the co borrower is not?
The exempt Veteran’s fee becomes zero and the non exempt share is charged normally. The lender removes the exempt portion from the calculation and applies the correct percentage to the non exempt share. The result is a single share fee that appears in closing costs and funding amounts.
- Exemption status is shown on the Certificate of Eligibility that the lender retrieves electronically, verify it early because an exemption completely eliminates the fee on that share and can change the decision to finance or pay in cash.
- When only one Veteran is exempt, the total fee equals the non exempt share result, which may be lowered further by a down payment tier or by demonstrating that the non exempt borrower is a first time user rather than a subsequent user.
- If exemption status changes during processing, alert your loan officer immediately, lenders must re disclose and update fee worksheets, which can affect underwriting ratios and how much cash is needed at closing.
- Confirm exemption on the Certificate of Eligibility, then ask your lender to produce a revised worksheet that shows the exempt share at zero and the non exempt calculation clearly for your records.
- Consider a small down payment strategically if it moves the non exempt borrower into a lower percentage tier, compare the cash cost with the fee savings to decide if it is worthwhile.
- Keep a dated copy of the updated fee calculation and closing disclosure, so any future refinance or audit has clear evidence of how the fee was determined at the time of closing.
How do down payment, first use, and subsequent use affect percentages?
Down payment tiers and prior use status change the percentage applied to each eligible share. First time users usually have lower percentages than subsequent users, and down payments can reduce the applicable percentage. Borrowers can optimize combined fees by adjusting down payment amounts and confirming prior use status accurately.
- A small down payment can sometimes produce an outsized fee reduction, especially when it moves a borrower into a lower tier, compare scenarios carefully since the lowest combined fee is not always the highest down payment option.
- Prior use status must be verified and restored when applicable, if a previous loan was paid in full and entitlement was restored, a borrower might be treated as a first time user for fee purposes, lowering the applicable percentage materially.
- In joint structures, each eligible borrower’s tier and use status are independent, which means one borrower’s down payment decision does not automatically change the other borrower’s applicable percentage unless the ownership allocation itself changes.
- Ask your lender to model two or three down payment tiers for each eligible borrower, then pick the mix that delivers the best combined fee with an acceptable cash requirement at closing.
- Verify entitlement restoration if a prior VA loan was paid in full, since restored entitlement can change a subsequent user back to first use status and lower the percentage applied to that share.
- Revisit ownership allocations only if necessary, because changing documented splits alters both fee math and underwriting ratios, coordinate carefully to avoid unintended effects on approval.
How do you document exemptions and avoid closing surprises?
Secure accurate Certificates of Eligibility and lock fee math early. The Certificate indicates eligibility and exemption, while the lender’s worksheet shows shares, percentages, and totals. Early verification prevents re disclosures, rescinds unnecessary down payments, and avoids last minute changes to cash to close or financed amounts.
- Have your lender obtain Certificates of Eligibility for each eligible borrower at the start, verify exemption status, entitlement restoration, and name accuracy, since any mismatch can cause recalculations late in escrow and invite avoidable closing day stress.
- Request a one page summary that shows ownership shares, first or subsequent use, down payment tiers, and the exact fee math, so everyone agrees on assumptions before you commit to rate locks and closing dates with tight timelines.
- Confirm that the closing disclosure reflects the same inputs and totals you approved earlier, and keep copies with recorder stamps and final figures to simplify future refinances or audits that review the fee calculation logic.
- Get the Certificates of Eligibility, confirm details, and resolve questions, then have the lender issue an updated loan estimate with the precise fee numbers for both shares.
- Schedule a brief call with your loan officer to review the worksheet line by line, including exemptions and down payment effects, and memorialize decisions in an email summary.
- Monitor disclosures and final numbers, if anything changes, request an immediate recalculation and written explanation to prevent documentation conflicts at signing.
The Bottom Line
Joint VA funding fees are share based, not one size fits all. Two eligible Veterans split the loan and each pays based on their own percentage, a mixed eligibility pair pays a fee only on the guaranteed Veteran share, and exemptions bring that share’s fee to zero. Down payment tiers and first versus subsequent use can shift percentages materially, so scenario planning matters. Confirm Certificates of Eligibility, run multiple worksheets, and document allocations early. Clear math prevents surprises and helps Veterans decide whether a small down payment, a title allocation tweak, or a timing change produces the best combined outcome.
References used
Frequently Asked Questions,
Do two eligible Veterans always split the funding fee fifty fifty
Usually yes. Lenders default to equal shares unless a different allocation is documented in title and underwriting. If ownership or liability is unequal, the funding fee math follows those documented shares to keep the calculation aligned with actual obligations.
Does a mixed eligibility loan charge a fee on the non Veteran share
No. The VA guarantees only the Veteran’s share, so only that portion is assessed a VA funding fee. Lenders may still require a down payment on the unguaranteed share to manage risk, which is a lender decision rather than a VA rule.
What if one Veteran is exempt and the other is not
The exempt Veteran pays nothing on their share. The non exempt Veteran pays the applicable percentage on their share only. The lender discloses a single share fee, which can be reduced by a down payment tier if that tier is elected.
Can first use versus subsequent use percentages differ between two Veterans
Yes. Each eligible borrower has their own rate based on prior use and any elected down payment tier. That means one half can be charged at a first use rate while the other half is charged at a subsequent use rate in the same transaction.
Can a small down payment reduce a joint funding fee meaningfully
Sometimes. If a small down payment moves one or both eligible shares into a lower percentage tier, the combined fee can drop more than the cash invested. Ask your lender to model two or three scenarios with precise math before you decide.
How is the fee handled when shares are not equal
The lender multiplies each documented share by the correct percentage and sums the results. Unequal allocations require clear documentation in title and underwriting, otherwise most lenders default to equal halves for fee calculation consistency and disclosure accuracy.
Where do I confirm exemption status officially
On the Certificate of Eligibility. Your lender retrieves it electronically, exemption status appears there and controls whether a fee is owed on that Veteran’s share. Resolve any discrepancies before underwriting issues the loan estimate and closing disclosures for signature.
Can the funding fee be financed into the joint loan amount
Yes. Many borrowers finance the total fee, which is the sum of the calculated shares. Compare financing with paying in cash and with making a small down payment to see which option delivers the best payment and equity profile for your goals.
Does the lender ever require a down payment on a Veteran share
It can happen under lender overlays for risk management, but it is not the default. Requirements are most common in mixed eligibility structures at higher loan sizes, or when credit files are thin and reserves are limited relative to payment obligations.
What documents should I keep to prove the calculation later
Save Certificates of Eligibility, the fee worksheet showing shares and percentages, the loan estimate, and the final closing disclosure. These items allow quick verification during a refinance or audit and reduce the chance of future confusion about how the fee was determined.
