How much is the VA funding fee on a Killeen home, and who doesn’t pay it?
The VA funding fee is a one-time charge of 2.15% of the loan amount on a first-use VA purchase with no money down, and 3.3% if you’ve used your VA loan before. On a $234,000 Killeen home (the median Killeen single-family sale in late October 2026), that’s $5,031 on first use or $7,722 on subsequent use. Veterans who receive VA disability compensation, eligible surviving spouses, and active-duty members with a Purple Heart pay $0. You can pay the fee at closing, roll it into the loan, or negotiate for the seller to cover it.
By Stephen Harris, Good Life Team | November 7, 2026
Two soldiers buy the same $234,000 house in Killeen. One pays $7,722 in VA funding fee. The other pays nothing. Same street, same price, same loan program.
The difference comes down to two questions: have you used your VA loan before, and do you have a disability rating? We walk every VA buyer through both before they write an offer, because the answer changes the cash you need, the loan amount, and what you ask the seller for.
This matters more here than almost anywhere. In the last few weeks of October 2026, 66% of Killeen closings used VA financing (CTX MLS, Oct 7 to 30). The funding fee shows up on most of the contracts we touch.
What the VA funding fee costs on a Killeen purchase
The fee is a percentage of your loan amount, not the purchase price. VA sets the rates. Here’s the current purchase chart from VA.gov, applied to a $234,000 Killeen home:
| Your situation | Fee rate | Fee on $234,000 |
|---|---|---|
| Exempt (VA disability comp, Purple Heart on active duty, and others below) | 0% | $0 |
| First use, less than 5% down | 2.15% | $5,031 |
| After first use, less than 5% down | 3.3% | $7,722 |
| 5% or more down (first or later use) | 1.5% of $222,300 loan | $3,335 |
| 10% or more down (first or later use) | 1.25% of $210,600 loan | $2,633 |
Notice the jump from first use to second use. With zero down, the fee goes from 2.15% to 3.3%. That’s the line that catches a lot of PCS buyers.
Why PCS buyers often land in the 3.3% tier
If you bought with a VA loan at Fort Bragg, Fort Campbell, or anywhere else, your Fort Hood purchase is “after first use.” That’s true even if you sold the first house, and true if you kept it as a rental. One exception from VA: if your only prior use was for a manufactured home, you still pay the first-use rate.
We see this surprise people at the Loan Estimate stage. They budgeted around 2.15% because that’s the number in every “VA loan basics” article. Then the lender quotes 3.3%. On a Harker Heights home at $300,000, that’s $9,900 instead of $6,450.
When putting 5% down makes sense
Five percent down drops the fee to 1.5% whether it’s your first use or your fifth. Run the math on that $234,000 Killeen home for a repeat VA buyer:
- Zero down: $0 cash for the down payment, $7,722 funding fee.
- 5% down: $11,700 cash for the down payment, $3,335 funding fee.
- Fee difference: $4,387 less in funding fee, in exchange for $11,700 more cash at closing.
That $11,700 still belongs to you as equity. Whether it’s the smart move depends on your savings, your tour length, and whether you plan to keep the house as a rental after your next PCS. For a soldier with a healthy emergency fund and a plan to hold the house, it can be worth a look. For a family that needs that cash for the move, zero down is usually the right call. We lay out both versions side by side before you decide.
Who is exempt from the VA funding fee
Per VA.gov, you don’t pay the funding fee if any of these apply:
- You receive VA compensation for a service-connected disability.
- You’re eligible for that compensation but receive retirement or active-duty pay instead.
- You’re a surviving spouse receiving Dependency and Indemnity Compensation (DIC).
- You’re a service member with a proposed or memorandum rating, issued before closing, finding you eligible for compensation based on a pre-discharge claim.
- You’re on active duty and provide evidence of a Purple Heart on or before the closing date.
The pre-discharge rule is the one we watch closely around Fort Hood. Soldiers who are ETSing or retiring here, and who file a disability claim before they get out, may receive a proposed or memorandum rating while still in uniform. If that rating is issued before you close, you’re exempt. If it shows up the week after closing, VA says that proposed or memorandum rating does not qualify for a refund.
So timing matters. When a buyer tells us a claim is in process, we talk with them and their lender about the closing date before we write the offer. Your lender confirms exemption status when they pull your Certificate of Eligibility (COE), so get the COE early.
The refund rule if your rating comes later
If you’re later awarded VA disability compensation with an effective date before your closing date, VA says you may be eligible for a funding fee refund. You contact your VA regional loan center to check. This is worth knowing for veterans who close while a claim is pending. Keep your closing documents.
A disability rating can also lower your property taxes in Texas. We covered that in our post on the disabled veteran property tax exemption near Fort Hood.
Three ways to pay it: cash, finance it, or ask the seller
1. Pay it at closing. Your loan stays smaller. Most of our VA buyers don’t choose this, because keeping cash for the move matters more.
2. Roll it into the loan. VA allows the funding fee to be financed. It’s the only closing cost VA lets you finance on a purchase; everything else is paid at closing or covered by credits. On a $234,000 first-use purchase, your loan becomes $239,031. At an illustrative 6% 30-year rate, that $5,031 adds about $30 a month to your principal and interest. Your actual rate and payment come from your lender.
One thing to watch: financing the fee means you start with a loan slightly higher than the price. If you might sell within two or three years, that thin equity matters. It’s part of the buy-or-rent conversation we have with every short-tour buyer.
3. Negotiate for the seller to pay it. This is where your agent earns their commission. VA caps seller concessions at 4% of the home’s reasonable value from the VA Notice of Value, and paying your funding fee counts toward that 4%. Normal closing cost credits are a separate bucket with no VA limit.
On a $234,000 home, 4% is $9,360. A $5,031 funding fee fits inside that, with room left for other concessions. Getting the contract language right in the TREC contract, so the credit lands in the right bucket and the lender can use it, is a detail we handle on every VA offer. If you want the full picture on what to ask for, read asking for seller concessions near Fort Hood.
Leverage for this exists right now. In Killeen, active listings sat at a median 71 days on market as of October 30, 2026, and 52% of homes that closed in October sold below their original list price (CTX MLS). A seller with a home that’s been sitting is often more open to covering a funding fee than cutting the price again.
What we check before you make an offer
The funding fee is one line on a Loan Estimate. It affects three decisions: how much cash you bring, how big your loan is, and what you ask the seller to cover. Here’s what our team confirms in the Smart Buyer Plan before you write an offer:
- Your COE and fee status. First use, subsequent use, or exempt.
- Any pending disability claim. If a rating could come before closing, we plan the closing date with your lender.
- Down payment options. Zero down versus 5% down, shown side by side.
- Concession strategy. Whether to ask the seller for the funding fee, closing costs, repairs, or a rate buydown, within VA’s 4% cap.
- Your plan for the house after this tour. Sell or rent, and how financing the fee affects either path.
The listing agent works for the seller. Our job is to sit on your side of the table and make sure the VA details work in your favor. If you’re coming in on orders, our Fort Hood PCS buying guide covers the full timeline.
Frequently Asked Questions
How much is the VA funding fee on a $250,000 home in Killeen?
With no down payment, it’s 2.15% of the loan on first use ($5,375) or 3.3% after first use ($8,250). With 5% down, it’s 1.5% of a $237,500 loan, or $3,563. If you receive VA disability compensation, it’s $0. Confirm your exact figure on your lender’s Loan Estimate.
Does a 10% VA disability rating waive the funding fee?
Yes. VA.gov says you’re exempt if you receive VA compensation for a service-connected disability, and that includes a 10% rating. You’re also exempt if you’re eligible for compensation but receive retirement or active-duty pay instead. Your lender verifies this through your Certificate of Eligibility.
Can the seller pay my VA funding fee in Texas?
Yes. A seller can pay it as a concession, and it counts toward VA’s 4% cap on seller concessions, based on the reasonable value on the VA Notice of Value. Regular closing cost credits are separate and not limited by VA. Your agent should write the request into the contract clearly so the lender can apply it.
Do I pay the funding fee again if I used my VA loan at my last duty station?
Yes, unless you’re exempt. Your Fort Hood purchase counts as subsequent use, so the zero-down rate is 3.3% instead of 2.15%. Putting 5% or more down lowers it to 1.5%, the same as first-time users.
Can I get the funding fee refunded later?
Possibly. If VA later awards you disability compensation with an effective date before your closing date, you may qualify for a refund through your VA regional loan center. A proposed or memorandum rating issued after closing does not qualify.
The VA funding fee runs from $0 to several thousand dollars on the same Killeen house, depending on your loan history, your disability rating, and your down payment. Knowing your number before you write an offer lets you plan your cash and ask the seller for the right things.
If you’re buying in the Fort Hood area on a VA loan, book a free Smart Buyer Plan call with our team. In 30 minutes we’ll walk through your budget, your timeline, and the areas that fit, and show you how we protect you from the first showing to the closing table. No pressure, no pitch. Book your call here, text or call 256-226-2757, or email stephen@mygoodlifeteam.com.
About Stephen Harris & The Good Life Team
Stephen Harris is a Texas Real Estate Broker (TX license 677386, All City Real Estate) and leads the Good Life Team, a Central Texas team that represents home buyers in Killeen, Harker Heights, Copperas Cove, Belton, Temple, Nolanville, Hutto, Pflugerville, and Round Rock. The team specializes in relocation buyers, Fort Hood PCS moves, VA loans, and new-construction representation, with roughly 500 closings and about $100M in volume. Their Smart Buyer Plan is built around one idea: who represents you matters, and our job is to protect you.
Stephen Harris, Real Estate Broker, TX license 677386, All City Real Estate. This article is general information about VA loan rules and is not lending, legal, or tax advice. Fee rates and exemptions are set by the U.S. Department of Veterans Affairs; verify current terms at VA.gov and with your lender. The Good Life Team is not affiliated with or endorsed by the VA or the Department of Defense. Texas Real Estate Commission: Information About Brokerage Services | Consumer Protection Notice.