The sad truth is, everything costs money and the VA Loan is no exception. In order for the loan to continue to be a zero down loan and free from mortgage insurance, the government and tax payers have to pay for that cost.
In order to offset that cost to tax payers, there is a small fee for the loan. The great thing about the fee is that it not only ensures the continuation of the VA Loan program, but it can be rolled into the loan itself resulting in the Veteran purchasing a home with no upfront money.
There are also exceptions to paying the fee. The government has decided that if a veteran has a service connected disability of 10% or more, they are not required to pay the fee. It’s just one more way of saying “thank you.”
For a more complete answer you can read the full blog post here.