If a first-time home buyer wishes to use his VA loan privilege for the first time and is not planning to make a down payment, what is the amount of his funding fee?

When a first-time home buyer is utilizing a VA loan without making a down payment, the funding fee is established at 2.3% of the loan amount. The funding fee is a one-time payment that helps to offset the costs of the VA loan program, making it financially viable for the government to continue offering these benefits to veterans.

This fee can vary depending on certain factors, including whether the borrower has previously utilized their VA loan entitlement and the size of the down payment if any is made. In the case of a first-time borrower opting for no down payment, the 2.3% rate applies. It's important for borrowers to understand this fee because it will be included in the overall loan amount, thereby affecting their total loan balance and monthly payments.

The other options represent funding fee percentages that apply in different circumstances—either for subsequent use of the VA loan or with varying down payment amounts. However, for a first-time buyer using a VA loan with no down payment, the 2.3% fee is specifically tailored to their situation.