Do VA Loans Require a PMI Premium

By Mark Kennan

Most mortgage lenders require a down payment and if that down payment does not exceed 20 percent, they impose an additional private mortgage insurance (PMI) premium. However, if you meet the service requirements, you can get a mortgage backed by the U.S. Department of Veterans Affairs that does not require any down payment or PMI.

The Department of Veterans Affairs does not charge a private mortgage insurance premium on VA loans. This is true regardless of the size of the down payment made on the VA loan.

The Department of Veterans Affairs prohibits the lender from charging private mortgage insurance premiums.

The Department of Veterans Affairs does require a funding fee for VA mortgages that ranges from 1.25 percent to 3.3 percent. The percentage for a particular loan is determined based on whether it is the first VA loan the person is taking out, the time in service and the amount of the down payment, if any.

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