The VA funding fee is a one-time charge on most VA loans: on a purchase with under 5% down, 2.15% of the loan on first use and 3.3% after; with 5% down, 1.5%, and with 10% down, 1.25%, first use or not. Veterans receiving VA disability compensation, and four other groups, pay nothing. It’s the only purchase cost VA lets you roll into the loan. The rates, unchanged since April 7, 2023, still apply in November 2026.
Example terms: a $450,000 VA 30-year fixed base loan plus $9,675 financed ($459,675 total), with 0% down on a $450,000 purchase, at 6.875% interest, 7.203% APR, is repaid in 360 monthly payments of $3,019.74 for principal and interest. Payments do not include taxes and insurance premiums, so the actual payment obligation will be greater. The 2.15% first-use funding fee is financed on top of the base loan; no monthly mortgage insurance. Includes 0.176% in discount points ($809). Purchase of a $450,000 single-family primary residence in Chesterfield County, Virginia; 740 credit score; 30-day rate lock; debt-to-income under 43%. Loan amounts are base loans; where an upfront FHA premium or VA funding fee is financed, it is added on top and the payment is figured on the total. Payments are principal and interest only. Terms as of November 9, 2026. Other numbers on this page are illustrations, not offers. Any rate shown on this site is an example. Rates may change or may not be available at the time of loan commitment or lock-in. More example terms and APR.
When a loan is more than the home’s fair market value (for example, when a VA funding fee or USDA guarantee fee is financed), the interest on the part above the home’s value is not tax deductible for federal income tax purposes. Talk to a tax adviser about deducting interest and charges.
Jump to a section
- VA funding fee chart for 2026
- How the VA funding fee is calculated
- Who is exempt from the VA funding fee?
- File your disability claim before you buy
- Can you get a VA funding fee refund?
- Should you put money down to lower the funding fee?
- Rolling the fee into your loan vs paying it in cash
- Work out your own fee
Your Loan Estimate says you’re borrowing more than the price of the house. That’s the VA funding fee, added on top. Here’s what it costs in 2026, who doesn’t pay it, when it can be refunded, and why I rarely tell anyone to put cash down just to shrink it.
VA funding fee chart for 2026
The fee is a percentage of your loan amount, and the percentage depends on three things: the type of loan, your down payment, and whether you’ve used your VA home loan benefit before. VA’s rates have been the same since April 7, 2023, and as of November 2026 this is still the current schedule. Veterans, active-duty service members and National Guard and Reserve members all pay the same rates.
| Purchase or construction loan | First use | After first use |
|---|---|---|
| Less than 5% down | 2.15% | 3.3% |
| 5% to less than 10% down | 1.5% | 1.5% |
| 10% or more down | 1.25% | 1.25% |
| Other VA loans | Funding fee |
|---|---|
| Cash-out refinance | 2.15% first use, 3.3% after |
| Streamline refinance (IRRRL) | 0.5% |
| Taking over (assuming) a VA loan | 0.5% |
| Manufactured home not permanently affixed | 1% |
| Buying a home VA owns (vendee loan) | 2.25% |
| Native American Direct Loan | 1.25% purchase, 0.5% refinance |
“First use” means the first time you use your VA home loan benefit. Every VA purchase after that is in the second column.
Look at that second column. With less than 5% down, a second use costs 3.3%, but at 5% down it drops to 1.5%, the same as a first use. That gap matters later on this page. On a streamline, VA also leaves the funding fee out of its 36-month payback test; the rest of that loan is on VA streamline refinance.
How the VA funding fee is calculated
Multiply the rate by the loan amount before the fee is added. VA’s own example: a $350,000 first-use purchase with nothing down carries a $7,525 fee (2.15%). On a $400,000 home it looks like this.
First-use VA purchase of $400,000, nothing down
| Base loan | $400,000 | |
| + | Funding fee (2.15% of $400,000) | $8,600 |
| = | Loan amount at closing | $408,600 |
Second use: at 3.3% the fee is $13,200 and the loan is $413,200.
At an example rate of 6.5% on a 30-year fixed, the rolled-in $8,600 adds about $54 a month to principal and interest.
Hypothetical example, rounded.
That’s why the loan amount on your paperwork is bigger than the price. Borrow $400,000 and you owe $408,600 the day you close. It also means you start with a little less equity than the price suggests, which matters if you sell in the first couple of years.
- First use
- After first use
$400,000 price, so the loan before the fee is $400,000 with nothing down, $380,000 with 5% down and $360,000 with 10% down. Each fee is VA’s current rate times that loan. Hypothetical example, rounded.
See the numbers
| First use | After first use | |
|---|---|---|
| Zero down | $8,600 | $13,200 |
| 5% down | $5,700 | $5,700 |
| 10% down | $4,500 | $4,500 |
Who is exempt from the VA funding fee?
Five groups pay no funding fee. VA calls it an exemption; you’ll also hear it called a waiver.
- Veterans receiving VA compensation for a service-connected disability.
- Veterans eligible for that compensation who receive retirement or active-duty pay instead.
- Surviving spouses receiving Dependency and Indemnity Compensation (DIC).
- Service members with a proposed or memorandum rating, issued before closing, based on a pre-discharge claim.
- Active-duty service members who show proof of a Purple Heart on or before closing.
On a $400,000 purchase with nothing down, the exemption is worth $8,600 on a first use and $13,200 after that. I check it on every VA file: my team confirms the exemption, takes the fee out of the loan and the payment, and makes sure nothing got added that doesn’t apply. With no fee and nothing down, the loan amount is the price.
Watch out
If you’re exempt, read your Loan Estimate anyway. A funding fee that doesn’t apply can still show up on a VA file, and it’s thousands of dollars. Ask before you sign anything.
File your disability claim before you buy
If you have a service-connected condition you’ve never claimed, get the claim in before you start the mortgage, even a couple of months before you go under contract. Claims take a long time, and what counts is where your claim stands at closing. If it’s still pending when you close, you pay the fee.
If you’re still serving, a pre-discharge claim matters. A proposed or memorandum rating issued before your closing date, saying you’re eligible for compensation, makes you exempt. Claim what you honestly have, and let VA decide.
A rating can matter beyond the fee. In Virginia, a veteran VA rates 100% service-connected, permanent and total disabled pays no real estate tax on the home they live in and up to an acre of land, and a surviving spouse can qualify too. You apply through your locality’s Commissioner of the Revenue. Lenders don’t all handle that tax the same way when they qualify you, so I get the lender’s position before the numbers go to underwriting. The local details are on Richmond-area property taxes.
Can you get a VA funding fee refund?
Sometimes. If you paid the fee and VA later awards you compensation for a service-connected disability, with an effective date retroactive to before your closing, you may be eligible for a refund. VA says to call its regional loan center if you think you qualify. A proposed or memorandum rating that comes after your closing doesn’t count, so that’s one more reason to file before you close. Keep your Closing Disclosure, because it shows exactly what you paid.
- Before you shop
File the claim
Get it in before you start the mortgage, even a couple of months before you go under contract. Claims take a long time.
- Before closing
A rating comes through
A rating that awards compensation makes you exempt. So does a proposed or memorandum rating on a pre-discharge claim, issued before your closing date.
- Closing day
Still pending
If the claim hasn’t been decided when you close, you pay the fee.
- After closing
A possible refund
If VA later awards compensation effective before your closing, you may be eligible for a refund, so call VA’s regional loan center. A proposed or memorandum rating after closing doesn’t count.
Should you put money down to lower the funding fee?
Usually not on a first use. A down payment shrinks the fee, but it never removes it unless you’re exempt, and I just don’t think the math is there. My test works like a points break-even: the cash you put in, divided by what it saves you each month. On a down payment, my line is 10 years. If it takes longer than that to earn the cash back, it’s a bad trade.
Putting 5% down on a $400,000 first-use purchase
| Cash you put in (5% down) | $20,000 | |
| ÷ | Payment savings at an example rate of 6.5% | $145 a month |
| = | Months to earn it back | about 138 |
About 11.5 years. The fee itself only drops $2,900, from $8,600 to $5,700; the rest of the savings is just borrowing $20,000 less. Going to 10% down takes about 12 years.
Hypothetical example on a 30-year fixed, principal and interest only.
A second use is different, because that’s where the fee drops furthest. With less than 5% down you’d pay 3.3%, or $13,200 on a $400,000 home. At 5% down it’s 1.5%, or $5,700, a $7,500 cut. The same $20,000 down saves about $174 a month and earns itself back in about 115 months, a little under 10 years. That passes my test, barely. 10% down on a second use takes about 130 months, and it doesn’t.
$400,000 purchase at an example rate of 6.5% on a 30-year fixed, principal and interest only. Months are the cash you put in divided by what it saves you each month. Hypothetical example, not a quote.
See the numbers
| Months to earn it back | |
|---|---|
| 5% down, after first use | 115 |
| 10% down, after first use | 130 |
| 5% down, first use | 138 |
When a bigger down payment does make sense:
- Your entitlement is partly used and the price is above your zero-down ceiling. That math is on VA entitlement.
- The price is above what your monthly payment target supports.
- A few thousand dollars down helps you sleep at night. That’s a fine reason, as long as your reserves stay full.
Tyler’s take
Keep the cash. On a first-use VA loan with nothing down, the funding fee on a $400,000 home costs about $54 a month at an example rate of 6.5%. I’d rather see that money in your reserves, where you can reach it in an emergency, than in the house, where you can’t get it back without selling or borrowing.
Rolling the fee into your loan vs paying it in cash
On a purchase, the funding fee is the only cost VA lets you finance. Every other fee and charge is paid at closing. That leaves three ways to cover the fee:
- Roll it into the loan. Nothing out of pocket for the fee itself.
- Pay it in cash at closing. A smaller loan, but paying $8,600 to save about $54 a month takes about 158 months, roughly 13 years, to earn back at an example rate of 6.5%. Same test, same answer.
- Have the seller pay it. That counts toward VA’s 4% limit on seller concessions, which is explained on how VA loans work.
Next to a conventional loan, remember what you’re not paying. VA has no monthly mortgage insurance at all, while PMI on a low-down conventional loan is a monthly charge until it comes off. How that works is on mortgage insurance.
Work out your own fee
The VA funding fee calculator runs this math for a purchase, a cash-out refinance or a streamline. Put in your price or loan amount, your down payment, first use or not, and check the exemption box if it applies. It shows the rate and the dollar fee line by line.
Find out where you stand on the exemption before you look at houses. For a veteran with a service-connected condition, that one question can be worth thousands of dollars, and it costs nothing to ask.
Questions people ask me about this
Do National Guard and Reserve members pay a higher VA funding fee?
No. VA charges the same rates to veterans, active-duty service members and National Guard and Reserve members. Your rate depends on the type of loan, your down payment and whether you’ve used the benefit before.
Can the seller pay my VA funding fee?
Yes. A seller paying your funding fee counts as a seller concession, and VA caps concessions at 4%. Normal closing costs the seller pays don’t count toward that 4%, so a seller can cover both if they agree to.
Are surviving spouses exempt from the VA funding fee?
A surviving spouse receiving Dependency and Indemnity Compensation (DIC) is exempt. If you’re a surviving spouse and not sure whether you receive DIC, confirm it with VA before you go under contract, because it changes your loan amount and your cash to close.
Is there a VA funding fee on a streamline refinance?
Yes, unless you’re exempt. The streamline (IRRRL) fee is 0.5% of the loan, which is $2,000 on a $400,000 loan, and it can be rolled into the new loan. A VA cash-out refinance costs more, 2.15% on a first use and 3.3% after.
Sources
Examples on this page are hypothetical illustrations, rounded for teaching. They are not a quote or an offer to lend. Rates may change or may not be available at the time of loan commitment or lock-in. For example terms with the annual percentage rate (APR), see example terms and APR.