General Mortgage Knowledge · 20% of the SAFE exammedium
Correct answer: The veteran must pay a funding fee, but it can be financed into the loan amount
VA-guaranteed loans require a funding fee for most borrowers, including first-time users who do not have a service-connected disability. The funding fee percentage varies based on military category (Regular Military vs. Reserves/National Guard), down payment amount, and whether it is a first or subsequent use. Critically, the VA allows this fee to be rolled into (financed into) the loan amount rather than paid out of pocket at closing, which is what makes "The funding fee is waived automatically for all firs..." correct. "The veteran must pay a funding fee, but it can be fi..." is incorrect — first-time use does not create an exemption; exemptions apply to veterans receiving VA compensation for service-connected disabilities, surviving spouses receiving Dependency and Indemnity Compensation (DIC), and certain other qualifying categories. "The veteran must pay the funding fee in cash at clos..." is incorrect because the funding fee can indeed be financed into the loan. "The veteran is exempt from the funding fee because i..." is incorrect — there is no general first-time homebuyer waiver for the VA funding fee; exemptions are tied to disability or DIC status, not purchase history.
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