VA Loan on a $400,000 House with $0 Down
A $400,000 home with $0 down is the headline VA loan benefit — but "no down payment" doesn't mean "no cost." Here's exactly what a first-time VA loan actually looks like, funding fee included, and how it stacks up against putting real money down conventionally.
- $0 down on $400,000 means the full $400,000 is financed, plus a one-time VA funding fee.
- First-time use, 0% down: a 2.15% funding fee — $8,600 on this loan, typically rolled into the balance.
- Total monthly payment lands around $3,099/mo — and there's no PMI, ever, on a VA loan.
- That's only about $22/mo more than a 5% down conventional loan on the same home — despite requiring zero cash down.
The real payment breakdown
Includes estimated national-average tax and insurance. The VA funding fee ($8,600) is financed into the loan balance shown above, which is standard practice — few borrowers pay it in cash at closing.
Why there's a fee at all if the loan is "no down payment"
VA loans require no down payment and never charge monthly mortgage insurance — but the program is self-funded by veterans and service members, not taxpayers. That's what the funding fee covers. For a first-time VA loan with $0 down, the fee is 2.15% of the loan amount. Put down at least 5%, and it drops to 1.5%; at least 10% down, and it drops further to 1.25%. Veterans receiving VA disability compensation are exempt from the fee entirely.
The real comparison: VA $0 down vs. 5% down conventional
This is the number most VA explainers skip. A conventional loan on the same $400,000 home with 5% down ($20,000 down, PMI included) runs about $3,077/mo. The $0-down VA loan comes to $3,099/mo — just $22/mo more, despite requiring no cash down at all. The funding fee isn't a discount, but it isn't a penalty either: it roughly offsets what PMI would have cost anyway.
What income actually supports this payment
Using the standard 28% front-end rule, a $3,099/mo payment implies household income around $132,800/year — before other debts are factored in under the full back-end DTI rule, which VA loans calculate somewhat more flexibly than conventional loans in practice.
Putting a little down changes the math meaningfully
Even 5% down on a VA loan cuts the funding fee from 2.15% to 1.5% and shrinks the loan itself — a combination that reduces both the upfront fee and the monthly payment simultaneously, unlike conventional loans where a bigger down payment only helps the second part.
Try it with your own numbers
The calculator below is pre-filled with this exact scenario ($400,000 price, $0 down) — add your own rate and see the real total.
One honest limitation: the calculator is a general-purpose tool and doesn't know this is a VA loan specifically — it will apply standard PMI (which VA loans never actually charge) and won't add the funding fee shown above. Use the total on this page as the accurate VA-specific figure; treat the calculator's own total as a generic conventional-loan comparison instead.
How we verify this: figures on this page are computed from standard published formulas and checked against our own calculators. Assumptions are stated inline. Found an error? Let us know — see our editorial approach.